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Microsoft Corporation (NASDAQ; MSFT)  announced its plan to purchase ZeniMax Media and its game publisher Bethesda Softworks for $7.5 billion. The price tag acknowledges that Bethesda owns some intellectual properties that are well-known and very popular in the video game marketplace. Bethesda is the creator of critically acclaimed and best-selling gaming franchises including  The Elder Scrolls and Fallout. 

Microsoft aims to "empower the more than three million gamers worldwide"

The acquisition is the third-biggest in Microsoft's history. The $7.5 billion costs to acquire ZeniMax Media and Bethesda is similar to the price tag of GitHub and is less than the amount it paid for LinkedIn and Skype. In a statement, Microsoft CEO Satya Nadella said, “Gaming is the most expansive category in the entertainment industry, as people everywhere turn to gaming to connect, socialize and play with their friends." "Quality differentiated content is the engine behind the growth and value of Xbox Game Pass—from Minecraft to Flight Simulator. As a proven game developer and publisher, Bethesda has seen success across every category of games, and together, we will further our ambition to empower the more than three billion gamers worldwide," added Nadella On the other hand, ZeniMax Media Chairman and CEO Robert Altman said, “This is a thrilling day for this company, our employees, and our fans. We have enjoyed a close partnership with Microsoft for decades, and this deal is a natural progression of those years working together." Microsoft will be adding about  2,300 ZeniMax Media employees to its payroll. The deal is expected to close in the second half of fiscal 2021. The tech giant bowed out of negotiations to buy an interest in TikTok, but it is continuing its strategy of using mergers and acquisitions to stay connected to young consumers.

The video game console market

We are in the ninth generation of video consoles. On November 10, Microsoft is launching new consoles. The Xbox Series X and stripped-down Series S version will compete with Sony's new PlayStation 5 console, which is also scheduled for release in November. Bethesda has two studios developing upcoming titles that are by-contract will be released first on Sony consoles. Microsoft agreed to honor those commitments to Sony but future games and cross-platform availability will be reviewed on a “case-by-case basis,” Phil Spencer, head of Xbox, told Bloomberg News.

The Gamepass advantage

Microsoft said it is buying Bethesda to help increase the choices in its Xbox Game Pass game subscription service. Which now has over 15 million subscribers.