What is Microsoft’s Plan After New Game Studio Acquisitions?

Unless you live under a rock, you’ve heard about Microsoft’s Bethesda deal, and the ripples it has already caused. Microsoft has made frequent game studio acquisitions in recent years, but this could mark a significant shift for the industry, and the possible return of a giant to the game.

A Brief History of Microsoft’s Games

As a game publisher, Microsoft Corporations was at its peak in the 80s and 90s when video games were quickly becoming more advanced and more detailed. Within its budding Games Group, Microsoft released a string of popular hits that many remember as some of their first experiences in PC gaming. Who can forget soaring through the skies in Microsoft’s first Flight Simulator from 1982 or creating a kingdom in Age of Empires? Microsoft then solidified its position in the gaming sector with the newly anointed Microsoft Games Studios, which coincided with the first Xbox console launch. At the same time, MGS released titles like Halo and Forza, as a result of the acquisitions of Bungie and Turn 10 Studios.


EA caused serious competitive disruption, though, establishing themselves as the top sports games developer and causing major modifications to Microsoft’s release plans in 2003. Microsoft seemed to bounce back with some notable series such as Fable and Halo: Reach, the Microsoft Games Studios became Microsoft Studios and took on the rights to Gears. This would be followed by a long period of quiet, seemingly only interrupted by the rebrand to Xbox Game Studios and refocus to Xbox titles.

The Xbox as its own Entity

I will note that Xbox Games Studio functions as its own organisation. Microsoft’s activity before Xbox came to fruition, and even now as a separate entity, does give us some clues for their intent for 2021 onwards. Xbox is a success, but it doesn’t develop its own games currently – it’s just a publisher. Conversely, in the early days, even from humble beginnings like Minesweeper, it appeared Microsoft was on the way to being a major developer and publisher. So, Xbox aside, what caused Microsoft’s gap in releases and the drop in first-party development of high-potential titles?

What happened to Microsoft Games?

Between 2004 and 2013 Microsoft’s game division was quiet but it wasn’t wholly idle. The shift from Microsoft Games Studios to Microsoft Studios was perhaps the first indicator of concrete internal changes, perhaps hinting at a desire to distance themselves from the gaming identity they’d picked up previously. Several further release plans were cancelled around 2012, like Kinect title Project Columbia, in part due to the Kinect’s low popularity. Simultaneously the entire game studio suffered staff cuts and downsizing. From there it seemed Microsoft had given up on anything that wasn’t Xbox – related or as reliable as Halo.  

Sudden Game Studio Acquisitions

Something has changed for Microsoft recently, though. The momentous game industry acquisitions have snowballed since 2017 with:

  • InXile Entertainment (Wasteland 3, Frontpoint VR: Proving Grounds) in 2018
  • Obsidian Entertainment (Outer Worlds) in 2018
  • Playground Games (Forza, Fable) in 2018

Another signal that Microsoft is looking to come into its own as a game developer is their creation of the game studio The Initiative in 2018. Very little has been confirmed by Phil Spencer, but we do know the studio is actively working on something. In the same year, the Age of Empires franchise also had its own studio created especially by Microsoft, named World’s Edge. Last but not least is the acquisition of the decade with Microsoft buying Bethesda Softworks’ parent company Zenimax Media for $7.5 billion.


What Happens Next for Microsoft?

This string of surmounting purchases would seem to push Microsoft toward a future that’s more invested in first-party game production than ever before. I think we could be looking at a large number of releases coming directly from Microsoft studios, perhaps even independent of the Xbox Games Studio; judging from their most recent creation and purchasing of studios. Could Microsoft have multiple AAA titles in the works? Are they preparing to mount a comeback for the old Microsoft Games Studios under new studio names? If so, Microsoft would certainly be an intimidating player for other developers to reckon with.