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[docbot]

Yea its their work, but its not their company. They can build their own company if they wanted, but they don't because of how risky it is and how big of an investment it is. The people that take that risk and put in that investment reap the rewards. Some random developer that works at a studio when it gets sold doesn't deserve any of the cash that the company was sold for.

i know basic capitalism.
but yeah we are talking numbers, where you only can take that risk when you have that kind of money to begin with. It's a walled off garden, the rich getting richer, etc. But whatever, I just think it kinda really shows with games, because the value is really quiet directly connected to the people putting in their heart and soul.

 

[ViciousAgenda]

It'll prove to be a worthwhile purchase in a year or two when it boosts sales of their consoles and sub services.

 

[KingdomHeartsFan]

i know basic capitalism.
but yeah we are talking numbers, where you only can take that risk when you have that kind of money to begin with. It's a walled off garden, the rich getting richer, etc. But whatever, I just think it kinda really shows with games, because the value is really quiet directly connected to the people putting in their heart and soul.

Its only a walled off garden to the unskilled leeches that dont have any ambitions. Anyone else can get in.

 

[quest]

What does sony got locked up exactly?

Any game that was up for timed exclusive or content from major publishers. They went to every major publisher to find out who was willing to deal and locked it up. There was a few threads of warriors taking victory laps over it.

 

[Yoda]

Microsoft needed to bolster their first party line up. Whether it's gamepass, xcloud, or their consoles... Microsoft needs to ensure their platforms have intrinsic value. Bethesda has had quite a few misses recently, but overall their IPs are very solid, Microsoft def benefits in the short-term and hopefully for them, in the long-term.

 

[Werewolf Jones]

Only time will tell, if we're not seeing any fire games by mid to late 2022 for the Xbox then it was all for naught.

 

[Woo-Fu]

It's hard to justify a price like that solely based upon revenue for the company itself. Zenimax Media was valued at 2.5B in 2016.

You have to look at it from a strategic point of view, though. It isn't about how much Zenimax products are worth in general, it's about how much effect they'll have on the XBOX brand as exclusives/timed exclusives and how much it might hurt their competitors to lose those titles.

Did Microsoft overpay? Probably. Was it worth it to push the deal forward and remove any other potential bidders from the equation? Probably. It's a nice burst of FUD with respect to Sony's offering this coming generation. Hard to put a price on that.

Another thing to consider is how Microsoft's growth as a publisher in its own right will give it a better position when negotiating with the likes of EA, Ubisoft, and ActiBlizz. It will change the balance of power when it comes to 3rd party titles.

 

[ACESHIGH]

Love all the M&A experts in Era... the salt from this day alone could have seasoned all patties sold by McDonalds this year worldwide.

 

[wolffy71]

If analysts at MS and zenimax thought the number should be 7.5 bil, I'm a bit likely to take their word for it than a bunch of neogaf posters. Qho the fuck really knows the details of thia deal. Or the other offers out there.

 

[JerryinSoCal]

IF they make the big games exclusive they overpaid, the reason these big publishers are worth what they are is because they bring in money from multiple platforms, Bethesda or not MS isn't going to automatically become the number one or even a close number 2 in the gaming industry they don't have the global appeal. Xbox at it's best couldn't match PlayStation at it's worst when it game to overall sales of the 360/PS3. Spending 4 Billion for Star Wars where they could make new movies yearly without restrictions on where they released them was a much better value proposition than spending $7.5 billion for a company that sells more copies of it's games on other platforms AND takes a long time between major releases.

We aren't likely to see Starfield release for at least another year and a half and ES6 is probably 2-3 years away, games like Doom (eternal didn't sell as well as the last game) and Wolfenstein are likely to see their sales cut by more than half if they go console exclusive which takes away a ton of the value that Bethesda provides.

 

[junguler]

they paid it so it was worth it to them, it's that simple.

 

[Yams]

I think the question worth asking is whether Microsoft thinks it can make more money yearly on a 7.5 billion acquisition than it would if that money just sat in a bank and accrued interest. Investors want to see money put to work.

 

[LOLCats]

world is really broken, considering all the devs having to work overtime, going borderline insane and then they're just getting traded over to MS without seeing any of the cash lol

some private companies give employees equity or a grant at a set price, i have no idea about zenimax, but hell I worked at a tiny ISP back in the 2000s and I got a grant then, it was a private company.

 

[vpance]

Probably a fair deal for all those studios and IP. I imagine with Fallout losing a lot of luster after the 76 bomba and few other recent games underperforming helped a lot too.

 

[DaleinCalgary]

7.5 billion is about 6x what the red ring of death cost MS.

 

[Balducci30]

No actually. Star Wars is one IP. They got many IP’s with this deal.

 

[Jimmyisback]

Not a big deal. It like when we lose 5 dollars sometimes from our pockets.

 

[SF Kosmo]

I think it's a reasonable valuation for their operation as it is now, but their acquisition obviously changes the direction of their business in a lot of ways. What is the value to MS in terms of market share? What is the cost of being platform limited on Bethesda's sales? It's hard to really say.

I am surprised MS would want to buy a company this size, with this many IPs to support, rather than a company like CD Projekt or Rockstar that would give them fewer but very important titles, which seems more in line with what MS needs.

 

[Clarissa]

7.5b is really good value and Imho a very wise purchase by Microsoft!

 

[SF Kosmo]

No actually. Star Wars is one IP. They got many IP’s with this deal.

And, crucially, NINE development studios to actually make the games (4 Bethesda proper, id, Machinegames, Tango, Arkane Lyon, Arkane Austin)

 

[DynamiteCop!]

They make $139,000,000 a day in net profit, it will take Microsoft 53 days to pay back what they spent on Zenimax/Bethesda.

 

[davepoobond]

for Microsoft, its not too much

but i do think they overpaid.

i think Zenimax was not so inclined to sell unless the offer was stupid high.

 

[Balducci30]

And, crucially, NINE development studios to actually make the games (4 Bethesda proper, id, Machinegames, Tango, Arkane Lyon, Arkane Austin)

Yeah this wasn’t a bad deal for Msoft at all. Anyone trying to spin it as one has no idea what they’re talking about. This also fits securely in line with the direction they are headed with gamepass becoming a sort of Netflix juggernaut but for video games - less about the platform it’s played on. It’ll pay off A LOT in the future.

 

[Aguero9320]

I think it only seems overpriced if you believe Microsoft bought it to counter the fucking PS5. They did not. They are intending to change (and dominate) the entire industry.

There are billions of potential GamePass customers around the world. That’s who Microsoft are working towards. Just like they did with Windows.

While the competition is focused on hilarious Craig memes Microsoft are quietly playing a different game.

 

[DaleinCalgary]

I think it only seems overpriced if you believe Microsoft bought it to counter the fucking PS5. They did not. They are intending to change (and dominate) the entire industry.

They didn't need to buy Bethesda to do this with Gamepass. This is a very expensive stunt before pre orders open to generate excitement with xbox fans and ones that left last generation.

 

[Balducci30]

They didn't need to buy Bethesda to do this with Gamepass. This is a very expensive stunt before pre orders open to generate excitement with xbox fans and ones that left last generation.

If you can’t see this is beyond an Xbox thing I don’t know what to tell you. They’re playing a long game here - it’s evidenced by their entire approach - making Bethesda exclusive to game pass subscribers will make it basically non negotiable to have it in some form

 

[HarryKS]

Companies are always bought at a premium. No reason to sell otherwise. This is how business works.

 

[DaleinCalgary]

If you can’t see this is beyond an Xbox thing I don’t know what to tell you. They’re playing a long game here - it’s evidenced by their entire approach - making Bethesda exclusive to game pass subscribers will make it basically non negotiable to have it in some form

Oh I get their plan.

 

[Jigsaah]

7.5 billion for Bethesda

Let's do a best case worst case scenario here.

Gamepass has 15 million subscribers now. Worst case, everyone pays $1.00 (because I know some idiot is gonna say this) a month for 12 months. that's 15,000,000 x 12 = $180,000,000 in 1 year.

The more likely case is that a good portion of users are paying the $9.99 price. For simplicity, middle of the road case is as the dollar subs end (assuming the number of subscribers stays the SAME) (15,000,000 x 10.00) x 12 = 1.8 billion in 1 year

Add in that a lot of people have game pass ultimate at $15 a month. Consider the additions coming from people who will do Xbox All Access for games pass and the XSS or XSX. IF literally no one did Xbox All Access the number goes up.

Let's imagine it's half and half (I don't know what the actual numbers are) So 7,500,000 x 10.00 + 7,500,000 x 15.00 = 187,500,000 x 12 = 2.25 billion in 1 year.

ALL THIS IS IF MICROSOFT NEVER GAINED ANOTHER SINGLE SUBSCRIBER.

The likelihood especially with Bethesda on board, means the subscribers will go up. There is very few reasons not to have Gamepass at this point.

My point is Xbox Gamepass is going to print money. The subscribers will fluctuate, their will be more entry level deals for $1, but Microsoft is playing the long game. There is no scenario I can think of short of a complete collapse of the games industry that will keep this from being profitable in short order.

And to answer the question OP, this was highway robbery. Xbox will net dividends from this.

 

[Aguero9320]

Oh I get their plan.

I’m not sure you do if you think this is a ‘stunt’ - the timing is funny, yes, but no one spends 7.5bn to one up the competition or for a preorder boost, they do it to win...

 

[MiguelItUp]

Pocket change to MS

Exactly. Not to mention I'm sure their company has a full understanding of when too much is "too much." I mean, it's not like Microsoft is a young company run by a bunch of mindless goons.

 

[DaleinCalgary]

I’m not sure you do if you think this is a ‘stunt’ - the timing is funny, yes, but no one spends 7.5bn to one up the competition or for a preorder boost, they do it to win...

I can call it a stunt if I choose. MS would have been better off spending that money on starting 100 new studios and creating more games to put on their service. This is a PR move after the loss of Halo and the optics of no real games coming from MS studios in the near future with the release of a new console.

 

[LOLCats]

they paid 1.5 billion for minecraft. naaa....

 

[quest]

I can call it a stunt if I choose. MS would have been better off spending that money on starting 100 new studios and creating more games to put on their service. This is a PR move after the loss of Halo and the optics of no real games coming from MS studios in the near future with the release of a new console.

The problem is finding enough people to staff that many studios with talent and your probably 6-7 years away from putting out a game. People are crying over obsidian taking 4 years for avowed lol. They need content sooner this does it. Of course it is partially a PR move to excite fans to by series consoles.

 

[Dr Bass]

They make $139,000,000 a day in net profit, it will take Microsoft 53 days to pay back what they spent on Zenimax/Bethesda.

7.5 billion for Bethesda

Let's do a best case worst case scenario here.

Gamepass has 15 million subscribers now. Worst case, everyone pays $1.00 (because I know some idiot is gonna say this) a month for 12 months. that's 15,000,000 x 12 = $180,000,000 in 1 year.

The more likely case is that a good portion of users are paying the $9.99 price. For simplicity, middle of the road case is as the dollar subs end (assuming the number of subscribers stays the SAME) (15,000,000 x 10.00) x 12 = 1.8 billion in 1 year

Add in that a lot of people have game pass ultimate at $15 a month. Consider the additions coming from people who will do Xbox All Access for games pass and the XSS or XSX. IF literally no one did Xbox All Access the number goes up.

Let's imagine it's half and half (I don't know what the actual numbers are) So 7,500,000 x 10.00 + 7,500,000 x 15.00 = 187,500,000 x 12 = 2.25 billion in 1 year.

ALL THIS IS IF MICROSOFT NEVER GAINED ANOTHER SINGLE SUBSCRIBER.

The likelihood especially with Bethesda on board, means the subscribers will go up. There is very few reasons not to have Gamepass at this point.

My point is Xbox Gamepass is going to print money. The subscribers will fluctuate, their will be more entry level deals for $1, but Microsoft is playing the long game. There is no scenario I can think of short of a complete collapse of the games industry that will keep this from being profitable in short order.

And to answer the question OP, this was highway robbery. Xbox will net dividends from this.

This is the worst math I've ever seen.

What are the costs associated with Game Pass and its content? You really need to take that into consideration. You mentioned that subs will go up with this Bethesda deal, and yet, did not mention the massive, massive, costs associated with needing to develop the various properties that are now under their control. And of course that Game Pass revenue has to also support all the other titles that are under its umbrella. It's not some magical free revenue generator where every dollar taken in is profit. Far from it. They've already said it's not a money maker for them and now they going deeper into the hole with it.

Microsoft Admits Xbox Game Pass Isn't Really Making a Lot of Money Right Now

Microsoft's General Manager for Xbox Games Marketing Aaron Greenberg admitted Xbox Game Pass isn't very profitable right now.

wccftech.com

This was three months ago. But now you have them raking in billions in profit every year, wheee!

Again, Netflix has way more subscribers, higher subscription prices, produces cheaper content, and is in the red.

And before a bunch of people start pissing and moaning in response to this, thinking I'm anti Xbox (which I'm not at all), I'm likely going to try and reserve an X tomorrow. I'm just talking about the reality of business and software development and the fact that none of this easy, none of it happens quickly, and there is certainly no silver bullet.

 

[Danjin44]

Overpaid or not this is something Microsoft needed, since these guys are not getting much JRPGs and lets be honest, majority of Xbox players are much more in to WRPG rather than JRPG.

My hope is this will force Sony to buy Japanese studio or use Studio JAPAN to give us first party JRPG.

 

[Dthomp]

Probably a fair deal for all those studios and IP. I imagine with Fallout losing a lot of luster after the 76 bomba and few other recent games underperforming helped a lot too.

I think this has alot to do with this deal from the Zenimax side. Alot of these franchises one could argue have never been at a lower point. Wolfenstein IMO has gone downhill since the first rebooted game, and for what I remember the co-op and VR one sold and reviewed like crap. Fallout 76...well LOL, Even 4 was basically an expansion of 3, Doom Eternal was fine, but I don't think it came close to what they expected after the success of Doom 2016. Dishonored wasn't really my cup of tea, is there space for it to keep going? Really the only title I would have interest in is a Prey 2, but not sure where that would pick up either.

Not saying it's a bad deal to get these studios, but this is alot of money and that's also not pointing out paying all these employees who in general are VERY slow with releases so for me this is a long term play, and not something that is gonna benefit Xbox gamers anytime soon other then saying they have something coming eventually.

 

[Jigsaah]

This is the worst math I've ever seen.

What are the costs associated with Game Pass and its content? You really need to take that into consideration. You mentioned that subs will go up with this Bethesda deal, and yet, did not mention the massive, massive, costs associated with needing to develop the various properties that are now under their control. And of course that Game Pass revenue has to also support all the other titles that are under its umbrella. It's not some magical free revenue generator where every dollar taken in is profit. Far from it. They've already said it's not a money maker for them and now they going deeper into the hole with it.

Microsoft Admits Xbox Game Pass Isn't Really Making a Lot of Money Right Now

Microsoft's General Manager for Xbox Games Marketing Aaron Greenberg admitted Xbox Game Pass isn't very profitable right now.

wccftech.com

This was three months ago. But now you have them raking in billions in profit every year, wheee!

Again, Netflix has way more subscribers, higher subscription prices, produces cheaper content, and is in the red.

And before a bunch of people start pissing and moaning in response to this, thinking I'm anti Xbox (which I'm not at all), I'm likely going to try and reserve an X tomorrow. I'm just talking about the reality of business and software development and the fact that none of this easy, none of it happens quickly, and there is certainly no silver bullet.

It simple math based on one known thing...the number of subscribers. The math itself is accurate assuming these things are true.

It's hard to speculate with the considerations you've mentioned because these right now are unquantifiable as people outside of Microsoft.

When you say "massive massive cost" can you put a number on that? I would think that you wouldn't be able to.

 

[ToxicPhantom]

So original when people type out "M$." So edgy.

Either way, I'm sure MS have their team of business analyst to make sure that the acquisition was worth it. What, people think MS just walked up to Zenimax this morning and told them, "I want to buy you?"

 

[SpartanN92]

Gotta consider the technical expertise and R&D they are getting out of Zenimax. This will pay dividends in other areas aside from just gaming.

 

[DaleinCalgary]

This is the worst math I've ever seen.

What are the costs associated with Game Pass and its content? You really need to take that into consideration. You mentioned that subs will go up with this Bethesda deal, and yet, did not mention the massive, massive, costs associated with needing to develop the various properties that are now under their control. And of course that Game Pass revenue has to also support all the other titles that are under its umbrella. It's not some magical free revenue generator where every dollar taken in is profit. Far from it. They've already said it's not a money maker for them and now they going deeper into the hole with it.

Microsoft Admits Xbox Game Pass Isn't Really Making a Lot of Money Right Now

Microsoft's General Manager for Xbox Games Marketing Aaron Greenberg admitted Xbox Game Pass isn't very profitable right now.

wccftech.com

This was three months ago. But now you have them raking in billions in profit every year, wheee!

Again, Netflix has way more subscribers, higher subscription prices, produces cheaper content, and is in the red.

And before a bunch of people start pissing and moaning in response to this, thinking I'm anti Xbox (which I'm not at all), I'm likely going to try and reserve an X tomorrow. I'm just talking about the reality of business and software development and the fact that none of this easy, none of it happens quickly, and there is certainly no silver bullet.

Im amazed at how many people don't realize MS needs to pay developers for putting their content on Gamepass.

 

[quest]

So original when people type out "M$." So edgy.

Either way, I'm sure MS have their team of business analyst to make sure that the acquisition was worth it. What, people think MS just walked up to Zenimax this morning and told them, "I want to buy you?"

Uncle phil left best buy after buying SSDs for the series consoles. Then swung zenimax headquarters with armed security and 75 duffle bags of cash. He said this enough to buy the whole fucking thing? Walked out with 8 new studios lol.

When asked how he paid for it he said straight cash homie.

 

[vpance]

I think this has alot to do with this deal from the Zenimax side. Alot of these franchises one could argue have never been at a lower point. Wolfenstein IMO has gone downhill since the first rebooted game, and for what I remember the co-op and VR one sold and reviewed like crap. Fallout 76...well LOL, Even 4 was basically an expansion of 3, Doom Eternal was fine, but I don't think it came close to what they expected after the success of Doom 2016. Dishonored wasn't really my cup of tea, is there space for it to keep going? Really the only title I would have interest in is a Prey 2, but not sure where that would pick up either.

Not saying it's a bad deal to get these studios, but this is alot of money and that's also not pointing out paying all these employees who in general are VERY slow with releases so for me this is a long term play, and not something that is gonna benefit Xbox gamers anytime soon other then saying they have something coming eventually.

Yeah it definitely feels like a "buy low" kind of target, at least on the potential of the IPs angle. The question is if the lows are actually in.

I think MS was looking at it from a quantity angle since they've been lacking there for a long time. And Zenimax has a lot of mid budget-ish type of games that fits the bill for game pass quality.

 

[The Pleasure]

They paid way too fucking mutch.

Bethesda/Zenimax was worth 2.5 billion in 2016. It didn't triple in value in four years after the shitty games they released the last few years.

 

[Ritsumei2020]

No, its just pocket money for MS. I like them throwing money around, we need some competition in the console space.

 

[Keihart]

Maybe they did, but maybe Zenimax wasn't even looking to sell, they maybe needed some convincing.

 

[ToxicPhantom]

Uncle phil left best buy after buying SSDs for the series consoles. Then swung zenimax headquarters with armed security and 75 duffle bags of cash. He said this enough to buy the whole fucking thing? Walked out with 8 new studios lol.

When asked how he paid for it he said straight cash homie.

That's so Phil.

 

[haveagood1]

• 
  

• Uncle phil left best buy after buying SSDs for the series consoles. Then swung zenimax headquarters with armed security and 75 duffle bags of cash. He said this enough to buy the whole fucking thing? Walked out with 8 new studios lol.
  
  When asked how he paid for it he said straight cash homie.
  

  

  As a life long Vikes fan

 

[newtypepilot]

7.5b for buggy games and endless releases of skyrim, what'd ya think

 

[aries_71]

Concerned OP. Don’t worry, MS know their Excels.