Microsoft Steps Up Xbox Game With ZeniMax Media Buy

Microsoft's deal to buy ZeniMax Media and its game studios for $7.5 billion bodes well for its Xbox consoles and could shift the competitive landscape in an industry shifting to online play.

The deal will give the US tech giant the parent-company of Bethesda Softworks, publisher of hit game franchises including Dishonored, Doom, Fallout and Elder Scrolls.

Bethesda and other third-party game studios typically make games for play on Xbox and rival PlayStation consoles made by Sony, seeking to sell as many copies as possible as they vie for people's entertainment time.

Since most major video games are playable on personal computers powered by Windows software, that would be unlikely to change once Microsoft owns ZeniMax and its studios.

Consoles, however, are another matter. PlayStation fans devoted to franchises such as Elder Scrolls or shooter Wolfenstein could find them unavailable on the consoles going forward.

"If you want to play Elder Scrolls 6, you will have to buy Xbox," said Wedbush analyst Michael Pachter.

The extent to which ZeniMax games will remain available on PlayStation will depend on how the company's contracts are written with Sony.

Microsoft could make new installments to franchises exclusive to Xbox, and stop making digital copies or disks of older games for rival PlayStation unless contractually obligated.

Adding blockbuster franchises from ZeniMax as exclusives would give the new generation Xbox console more appeal when it takes on the latest PlayStation in the market in November.

Pricing of the consoles is similar, and PlayStation is thought to have an edge but players are strongly driven by game content.

"If you were going to buy a PlayStation to play Bethesda games, now you are not," analyst Pachter said.

Microsoft buying ZeniMax could be good for other third-party studios though, because players determined to stay with PlayStation may seek out new titles.

A committed PlayStation lover, for example, might buy Dragon Age instead of the epic fantasy game Elder Scrolls.

Having Bethesda games become Xbox exclusives would also mean less competition for other third-party studios for the time and money of PlayStation users, so players could see a rise of new titles.

The acquisition could also add momentum to a shift by players to games hosted in the cloud, since Microsoft plans to add Bethesda's iconic franchises to its nascent Xbox Game Pass subscription service for console and PC.

Microsoft is focused on building out subscription and cloud services to become a Netflix of the games industry, according to some analysts.