Microsoft’s Latest Earnings Boom Driven in Part by Video Games

To call 2020 a strange year might be somewhat of an understatement. With COVID-19 wreaking economic chaos across much of the globe, it is hard to believe that anyone is “doing well” from a revenue standpoint right now.

But there has been one boom during the world’s collective shut-in saga, and that is the video game industry. Not only is it posting record revenues and profits but also the current growth trajectory puts it on pace to displace more traditional titans of entertainment.

The only question is whether any of this will last once people are allowed to socialize again. Analysts with some history of hitting things right on the head when it comes to predicting the often wild ride that is the video games industry say that growth will not only continue but accelerate.

Perhaps that’s why Microsoft was more than happy to take a long-term bet on gaming way back in the Gates era with its Xbox. Now they’re reaping the profits of that foresight as Redmond’s latest earnings reports not only showed a significant contribution from its other “visionary” initiatives like cloud computing but also from its Xbox gaming division.

The company just reported $37.2 billion in revenue, beating Wall Street expectations of $35.8 billion, with video games surging forward to help bring home the bacon.

Microsoft’s director of investor relations Kyle Vikstrom told CNN Business, “Gaming is one of the largest and fastest-growing forms of entertainment in the world. We expect there to be more than $200 billion of revenue in this industry in 2021…We’re seeing a really great early response to the console that’s going to launch next quarter.”

Aside from the Xbox, Microsoft also owns Minecraft and recently acquired Bethesda, maker of The Elder Scrolls and Fallout along with id Software’s DOOM series. Interestingly, Bill Gates wanted to acquire DOOM’s makers back in the early days of PC gaming because it, at one point, was more widespread than the Windows operating system itself. It looks like the company has finally fulfilled that wish.

Moving on to the next generation with Sony, Microsoft is putting forth two visions for the future of gaming, the “budget” Xbox Series S and the high-end Xbox Series X. There are also rumors that the company is putting out feelers to Japanese publishing houses in the hope of acquiring them and adding to the growing stable of developers and IP that Redmond is amassing. Perhaps noting that Sony’s strategy of high-quality, triple-A exclusives helped secure it the lead in the last generation, Microsoft’s strategy makes sense if the company sees gaming as a major contributor to the bottom line going forward.

What do you think of Microsoft’s next-gen plans? Are you planning on picking up one of the company’s systems? How do they stack up against Sony’s PS5? Let us know your thoughts in the comments section below if you like.

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Microsoft Buys Bethesda in Surprise Next-Gen Power Move

The next-gen console wars are already underway and we don’t even have machines in our hands yet. Microsoft’s purchase of Bethesda was definitely a “shots fired” move for the gaming press but does it really matter in the large scheme of things? Well, it depends on how much you love Bethesda’s stable of games – among which include The Elder Scrolls, Fallout, and DOOM – as well as whether or not these will be Microsoft PC/Xbox exclusives moving forward.

In a post on their website title “Why Microsoft is a perfect fit,” Bethesda explains that the new ownership, “…allows us to make even better games going forward. Microsoft is an incredible partner and offers access to resources that will make us a better publisher and developer. We believe that means better games for you to play. Simply put – we believe that change is an important part of getting better. We believe in pushing ourselves to be better. To innovate. To grow.”

Of course, $7.5 billion in cash probably didn’t hurt things either. Nonetheless, Bethesda and Microsoft are casting this move as a natural evolution for both parties.

“[We] have a long history of working with Microsoft. Our companies share many of the same basic principles. We believe in a culture that values passion, quality, collaboration, and innovation. When I think back to the first time we decided to shift from being a PC-only developer and make Morrowind for the original Xbox, it was a move that countless people said would never work…nobody on consoles wanted a game that big and complex. But Microsoft believed in us and so did you. And now RPGs of all shapes and sizes are hugely successful on consoles.”

As many people are pointing out, this purchase doesn’t necessarily mean that Microsoft will limit Bethesda’s games to just its platforms. As with Minecraft, Microsoft could go with a broader route given the huge popularity of titles like The Elder Scrolls.

Looking forward, optimists also highlight that Microsoft’s deep pocketbooks could result in better games moving forward. We’re not going to name any specifics here but we’re sure any true Bethesda fan can name more than a couple of things they’d like to see change in the future.

The press release from Pete Hines did tease Starfield, the company’s big new mysterious IP, but it didn’t really divulge any information on one of the more anticipated titles rumored to be in development. Since we don’t really know much about that game in general, speculation as to whether or not it will be an Xbox exclusive is premature at this point.

Interestingly, Microsoft’s presser also mentioned Starfield:

“With unique investments in content, community, and the cloud, Microsoft’s gaming strategy differs from others by empowering people to play the games they want, with the people they want, anywhere they want. Games are the primary growth engine in gaming, and games are fueling new cloud-gaming services like Xbox Game Pass, which has reached a new milestone of over 15 million subscribers. With the addition of Bethesda, Microsoft will grow from 15 to 23 creative studio teams and will be adding Bethesda’s iconic franchises to Xbox Game Pass. This includes Microsoft’s intent to bring Bethesda’s future games into Xbox Game Pass the same day they launch on Xbox or PC, like Starfield, the highly anticipated, new space epic currently in development by Bethesda Game Studios.”

What do you think of Microsoft’s purchase of Bethesda? Do you play Bethesda’s games? Let us know your thoughts on this in the comments section below if you like.

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Microsoft to Purchase Bethesda Company

What does this mean for Bethesda Games?

Microsoft has officially announced that they will move forward with the purchase of game company Bethesda. Most of you are probably familiar with Bethesda or their huge blockbuster game franchises such as Elder Scrolls, Fallout, Doom, Wolfenstein, and more. Microsoft has agreed to purchase the company for $7.5 Billion.

More specifically the purchase for is ZeniMax Media – the parent company of Bethesda and Id software. The deal is stated to close in 2021. Microsoft has stated that Bethesda will still operate in its own division and retain current company structure.

So what does this mean?

Aside from giving Microsoft even more game studios under its belt and some control of these franchises, many may be worried about games becoming exclusive to only Xbox/PC. I personally don’t think the biggest franchises will become exclusive to Xbox and PC. The bottom line is if they did become exclusive they would be missing a lot of sales from people who only have a different platform. Exclusivity may drive demand for Xbox up, but at the same time Microsoft is pushing for cloud gaming with their newly released XCloud. This would remove some need for consoles, thereby making sales of copies of the games a bigger source of revenue.

Official Microsoft Release