Bethesda x Xbox: the ecosystem ramifications

Always expect the unexpected.

[Hi, I’m ‘how people find your game’ expert Simon Carless, and you’re reading the Game Discoverability Now! newsletter, a regular look at how people discover and buy video games in the 2020s.]

Look, I was originally going to hold off until after tomorrow’s ‘thing’. But there’s no way I couldn’t comment on Microsoft’s announcement that it’s buying ZeniMax Media (and therefore Bethesda) for $7.5 billion. In cash. So, bonus newsletter about its discoverability ramifications - let’s go.

What does Bethesda x Xbox mean for the ecosystem?

I don’t think I need to talk that much about the IPs involved in this deal. You can just scan the above image, really. But as noted on Twitter, the company gets 2,300 talented devs (!), across studios such as Bethesda Studios itself, id Software, ZeniMax Online, Arkane, Machine Games, Tango Gameworks, mobile-first studio Alphadog Games, and ex-Human Head staffers at Roundhouse Studios. This is... impressive.

This multi-billion dollar investment is going directly into the ‘content wars.’ Specifically into the game subscription wars that Microsoft is intent on being ahead of Google Stadia and others (particularly Sony) on.

Should you need confirmation that this deal is mainly about subscriptions, the Microsoft PR notes an “intent to bring Bethesda’s future games into Xbox Game Pass the same day they launch on Xbox or PC.” This is a continuation of the play I was talking about in a recent newsletter. As I noted:

“Ultimately, the Game Pass subscription plan (software as a service) is the ‘center of the offering’ for Microsoft, not a piece of hardware. This is incredibly relevant for game discoverability, since it shifts the lens from an ‘evaluate and buy’ to a ‘subscribe and try’ mode. So all eyes should be on this as it continues to roll out.”

Although Bethesda’s games won’t be removed from other devices, it seems unlikely that the biggest upcoming games will also launch on PlayStation, unless already contracted, as per Bloomberg’s Dina Bass talking to Xbox’s Phil Spencer:

This doesn’t mean new games won’t make it to Steam or Switch, but mainly as teasers for the Game Pass ecosystem, in my view. Selling a game for $60 on Steam, when you know you can get a $10 a month subscription that gets you access to it and hundreds of other games? That’s upsell in the long term, folks.

Let’s take a quick inventory on the subscription wars. Nintendo isn’t interested in fighting on that playing field, and possibly never will be. Same for Steam, of course - besides hosting subscription services like EA Play on its platform, and taking a cut.

And Xbox’s true rival PlayStation would prefer not to, but can probably feel itself getting dragged inexorably into the fray. (Apple and Google are doing ‘things’ in the space with Apple Arcade and Stadia, too - just underdeveloped currently.)

So maybe there’s all kinds of people out there, and maybe game subscriptions aren’t going to dominate in the future. And for Sony, I’ve got to believe that they’ve been internally quoting the movie War Games, where "the only winning move is not to play." (I think ‘mutually assured destruction’ was involved too somewhere.)

But when companies like Netflix are getting away with this graph, albeit for filmed content:

…why aren’t we going to see more massive (FAANG?) companies use loss-leading tactics to get ahead? Xbox Game Pass now has 15 million subscribers as of today, an impressive rise, and Microsoft has over $100 billion of cash in hand.

On the other hand, I believe Sony’s future success is hinging on PlayStation being a profit center, not paying billions for devs and publishers. So.. maybe it’s looking like the classic ‘monopolist as disruptor’ situation - at the expense of Company X.

I’m not sure who Company or Companies X is, though. Is it Sony, or is it regular devs and publishers? And could there be some surprising upsides in here for devs or publishers in Company Y who can get on the subscription train at the right station? (There already was, for the devs bought by Microsoft!)

Guess we’re going to find out. And the true ramification here is that Microsoft is making multi-billion dollar acquisitions because it wants to accelerate the subscription transformation in the game biz. And we’re all along for the ride.

Other Stuff…

After that bombshell, I do have a few other granular game discoverability notes to round up. So might as well get them out of the door at the same time. Let’s see here:

  • The full Japanese indie dev showcase from new organization Asobu (2 hours long, lots of interesting stuff, including some Western games too) aired early this morning U.S. time, and is now available on-demand on YouTube - go check it.

  • Steam is still dickering with its Community Awards, and has added larger tips - up to 800 points - and a bunch more stuff besides - they note: “The Points Shop also represents a new way to get Trading Card items such as emoticons and profile backgrounds – you can now exchange points for them.”

  • Here’s more on the Xbox mobile app for Android, which also includes game streaming built in - “you no longer need to be an Xbox Insider to play games installed to your console on your phone.” And a bunch of other clever stuff coming up for Xbox Series S/X: “Once you’re set up, use the app to install any game to your console, manage your game library to free up space, or as a remote control.” Interesting.

  • The latest Steam weekly charts (by total units sold) are out. Some impressive continued sales in there from Crusader Kings III and Sea Of Thieves, along with Hades and Craftopia (interesting/surprise hit from a Japanese indie, pictured!) sneaking up into the charts too.

  • A discussion over the top Discord servers made me check Stephen Takowsky’s hand-curated top list again, and whoa, Innersloth (Among Us) has rocketed to the top of the charts. Fortnite and Minecraft’s Discords are also now over the 500,000 mark, which I think was a hard server limit at one point?

  • Courtesy of Chris Zukowski, we have a full write-up of one of the recent Steam Q&A sessions (possibly the same one I mentioned on Friday), but with a LOT more questions answered. Go check it out, lots of handy stuff in there.

Finally, and following up on the last newsletter, Rune Skovbo Johansen was kind enough to make an actual infographic for Steam review scores:

Feel free to paste to your bedroom wall like it’s a New Kids On The Block/One Direction/BTS* (*please select applicable decade, I couldn’t find any legit 2000s boy bands) poster.

Take care,
Simon.