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Wild Microsoft acquisition rumours circulate

It is a well known fact at this point that Microsoft is struggling when it comes to delivering first-party content for PC and Xbox. With that in mind, it wouldn't be crazy to think that the company would be looking into buying out other studios. Several big names have been thrown around this week, with the rumor mill pointing towards PUBG Corp, EA and perhaps the most unlikely, Valve.

This week Polygon published an extensive article going over the Xbox One's exclusive games problem. It contains various quotes from industry analysts who expect Microsoft to make some form of big announcement fairly soon. There is one particularly interesting section though, in which the site claims to have heard from sources that Microsoft may be exploring various acquisition routes, with three names on the table: PUBG Corp, EA and Valve. Right now, EA seems to be the most likely option to pan out.

Last year, Xbox head Phil Spencer was promoted to Vice President of gaming within Microsoft, giving him a larger say in how video games fit into the company's overall strategy and where investments should be made. Spencer has already snagged one major acquisition for Microsoft in the form of Mojang back in 2014, but it seems that more could be on the horizon. According to SuperData Research CEO, Joost Van Dreunen, we should be “expecting to hear Microsoft announce something very, very shortly”. Whether that means a major studio acquisition, or building on its current roster remains to be seen.

However, there is reason to be optimistic. Microsoft has $130 billion in cash sitting around and prime for spending to boost other areas. PUBG is already selling very well on Xbox One, and Microsoft has some form of relationship with the folks at PUBG Corp, so that is an option. I think we can rule out Valve entirely as the company is already in a comfortable position, being a famed video game studio in addition to the largest PC gaming platform holder. Not to mention the fact that Gabe Newell has been critical of Microsoft over the years.

EA on the other hand is a publicly traded company. Microsoft would have to shell out $36 billion to acquire the publisher in addition to a premium in order to get investors on board. However, according to Polygon's ‘reliable source close to Microsoft', this is an option being talked about behind closed doors.

EA and Microsoft have always had a close relationship, with most EA-published titles selling among the best on Xbox One. But why would Microsoft want to pick up EA, particularly after all the PR disasters the publisher has endured? Well as VentureBeat points out, a large chunk of it could simply come down to boosting the Xbox Game Pass.

Microsoft recently announced that all future first-party games will arrive on Game Pass for PC and Xbox the same day it goes on sale. The subscription-style game service is something that Microsoft is investing in, bringing the ‘Netflix model' to games. If Microsoft picked up EA, then all of ‘The Vault' content on the EA Access service would transfer over to Game Pass.

Aside from that, such a huge acquisition would also give Microsoft control over some very impressive studios, including Bioware and DICE. Suddenly Microsoft would have the expertise and infrastructure to start pushing out exclusive IP in other genres. We could start seeing RPGs and action games, breaking the constant cycle of racing games and shooters that Microsoft has been stuck with for most of this console generation.

At the end of the day though, it all comes down to whether or not EA's investors would agree to sell and whether or not Satya Nadella would be willing to give up such a hefty chunk of Microsoft's cash. As far as we know, this is just something that has been talked about on Microsoft's end. There is no confirmation that the company has approached EA, or even PUBG Corp, about a potential buyout at this stage. With that in mind, these are all wild rumors for now.

KitGuru Says: The number of active studios under Microsoft's wing has dwindled over the years. The company definitely needs to do something to boost its first-party content output if it wants to compete with Sony in the future. Still, to me at least, the idea of Microsoft buying EA or Valve seems a bit too wild. Though I must admit, it would be nice to see Bioware under new leadership, because right now the studio seems prime for the EA chopping block.

 

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12 comments

  1. Absolute Infinite

    Its PUBG Corp.
    Gonna Be PUBG Corp.

  2. doesn’t the game run horribly on console?

  3. 130billion to play with and only 36 billion to acquire? EA’s investors only give a shit about profit at any cost so they’d be easy as balls to buy out. Come on Microsoft, do the world a favour and start the hostile takeover

  4. Small company with a big game, very easy to buy out, Mojang is the exact same story. and I’m sure the name is big enough to look past the issues.

  5. Nikolas Karampelas

    Yeah, it can’t get worst than EA anyway so at least save what’s left of studios under EA.

  6. Nikolas Karampelas

    It is a shame how low they are in game publishing given MS gaming past, that Balmer guy left their gaming side to wither over the years.

    However if they don’t go after EA maybe they can just gather the big names that left the best studios that EA killed or is killing atm and make their own studios? Given the availability of game engines and technology in the wild it is not like they will start from scratch.

  7. More likely to not bother and just throw in the towel. Xbox has been a huge failure both marketshare, reputation as and financially for Microsoft as and it doesn’t fit their future direction under Nadella

  8. None of this sentence makes sense.

  9. Xbox doesn’t make money, users aren’t happy and it doesn’t fit with the new CEO plans…

  10. Wrong. During their financial earnings call Nadella stated that Xbox was profitable and they were going to push harder into the gaming market, including with Xbox. Given it is a 100 billion a year industry they’d be silly to try and exit it rather than try to increase their share in it.

  11. Actually, EA is the least likely due to being the mosty expensive to buy, but more importantly due to ther fact EA’s revenue comes mostly from multi-platform licences like Madden, FIFA, Star Wars, etc. The owners of those IPs no doubt insist that EA make those multi-platform so they get more royalties. If MS buys EA they’d have to keep those games on competing platforms or lose the licences, thus reducing EA’s profit by over 50%. Neither makes it a good business move. Thus, EA is the *least* likely of the three.

  12. Not lifetime profitable, currently profitable this earnings quarter. Like when Microsoft hid $2.5bn in a single quarter and took s hit for RROD repairs, had a massively unprofitable quarter and then where able to report 100k profit the next quarter. Accounting is funny like that, I can’t run my house finance like that, but in American, despite SARBOX , you can still play accounting tricks.