Should Microsoft Continue Putting Bethesda Games On PlayStation And Nintendo, Or Should They Make Them Xbox Exclusive?

You can make arguments for either side, but one makes more sense than the other.

Posted By | On 13th, Feb. 2021 Under Article, Editorials


Although Microsoft announced their industry shattering acquisition of ZeniMax, the group that is the parent company of Bethesda (one of the largest third party publishers in the industry, and the folks behind some of the biggest franchises around, most notably The Elder Scrolls and Fallout), we have been waiting on “regulatory approval” to know whether or not the deal will actually go through. The recent announcement of the formation of “Vault”, a Microsoft subsidiary that will basically operate ZeniMax for them, however, seems to indicate that the finish line is in sight for the process to complete. Indeed, the formation of an independent subsidiary may itself have been a move specifically intended to appease regulators.

The legalities of the situation aside, however, it now becomes clear that Bethesda, and all the incredible studios, games, and IPs they hold, will become a part of Xbox Game Studios. Which is an incredible win for Microsoft in their attempts to bolster their first party (and probably makes their first party more appealing than Sony’s, at least to me) – but which does beg the question, are these incredible, industry defining, mammoth franchises and games going to be Xbox-exclusive from now on?

Now to be clear, this isn’t a discussion about what I think will happen, this is a discussion entirely independent of that. This analysis is trying to approach the problem from the perspective of whether or not Microsoft should continue to put Bethesda games on PlayStation and Nintendo platforms (after all, one of the reasons those games have sold the numbers they have is because of their ubiquitous availability). From Microsoft’s perspective, is it more sensible to continue putting these games on rival consoles? Or are they better served by keeping them within the Xbox ecosystem?

How Microsoft Measures Success

Before we get to that answer, however, let’s take a moment to, once again, reiterate what Microsoft’s core business strategy in the gaming market is with Xbox. With the history of platform holders such as PlayStation and Nintendo who prioritize hardware unit sales to facilitate software unit sales and revenues via licensing models, it can become easy to get stuck in a mode where the only mode of success one considers is the traditional ones – i.e., if you are not selling 100 million units like PlayStation or Nintendo, then you’re not really doing well.

To be fair, that is true if you are in the market to primarily sell consoles. Microsoft did use to try to go for that – the Xbox, Xbox 360, and early Xbox One all attempted to approach the market with that end goal in mind, of selling the most hardware and software units. However, to their credit, Microsoft apparently seem to have realized that there’s no point repeatedly bashing your head against the wall (which is basically what going up against players as entrenched as PlayStation and Nintendo would amount to), and they made a smart pivot around the middle of the Xbox One gen.

Microsoft’s strategy now is to sell subscriptions. Their definition of the Xbox platform is now hardware agnostic, and Xbox comprises of a range of hardware platforms, services, subscriptions, and games. Microsoft wants to be your primary mode of interacting with a game – but they don’t really care how you get there. If you want to play purely on PC, they’re fine with that. Mobile? Same thing. If you want to use Xbox consoles for the convenience of console platforms, they’re there too. Across this whole spectrum, their attempt is to cater to you via Xbox Live and Game Pass services – essentially, if you are playing on your phone or your PC, Microsoft would love for you to be going through Game Pass using your Xbox Live account. Hell, even on PlayStation or especially Switch, Microsoft has games (such as Minecraft or Ori and the Blind Forest) with Xbox Live hooks in them.

ps4 xbox one switch

This is a dramatically different way of approaching the market, because in this case, Microsoft can sell a very low number of units (lower than even the Xbox One managed), and still be extremely successful thanks to an engaged, large subscriber base, and the recurring revenue that brings in. Basically, Microsoft have decided if they can’t sell 20 million copies of Halo to 100 million Xbox owners, they would rather have 100 million Game Pass users – across Xbox and non-Xbox hardware alike – all playing Halo instead, and make money off of them that way.

So Microsoft’s primary motive is no longer to sell consoles. But this does not mean they don’t care about selling consoles at all. Of course, they would be happy if they did – on average, consoles still bring in more revenue per user than a PC or mobile player would. With a console player, you get money from the purchase of the system (if it’s being sold at profit), accessories such as controllers, subscriptions such as Xbox Live Gold (which is necessary to play online on Xbox consoles, but not PC or mobile), and money from every single game they purchase on the system. None of this holds true for their users on PC or mobile. On PC, Microsoft only gets money for purchases of their own games, and money only for Game Pass subscriptions (but not Xbox Live Gold). On PC, Microsoft does not get money for third party game purchases unless they are purchased via Microsoft’s store (and let’s be honest, how many people do you know who play on PC and only use Microsoft’s store, or even use it at all?). On PC, players can use any controller they like, including PlayStation, Nintendo, and Steam ones. Ditto for mobile too.

So it comes down to a balancing act – Microsoft obviously wants to increase Game Pass subscriptions as the primary and overriding business motive, but not do so in such a way that people are entirely disincentivized from wanting to buy an Xbox console. And I think this fact, over all else, is what will inform Microsoft’s strategy with Bethesda and their games.

What Microsoft Should Do With Bethesda Games

Keeping in mind all of the above, Microsoft will probably be best served keeping Bethesda games Xbox ecosystem exclusive – at least for a fairly large launch window. There are multiple reasons for this, but they all come down to traditional business benefits of exclusivity, combined with also getting perks from their current subscription focused strategy.

First: since the Xbox ecosystem is currently spanning PC, mobile, and Xbox consoles, the addressable install base for Bethesda games is still huge. The traditional loss of audience one may have considered in a situation where a third party publisher was bought up by a platform holder doesn’t apply here. Bethesda isn’t just selling to Xbox console owners, it’s selling to Xbox console owners, as well as players on PC (and remember, PC and Xbox are the two biggest markets for Bethesda games, in that order), and potentially, a universe of hundreds of millions of players on smartphones and tablets. 

Secondly – keeping the game exclusive to the Xbox ecosystem compels people to engage with it if they want to play Bethesda games. Your choices if you want to play The Elder Scrolls 6 are either to buy an Xbox console and a copy of the game; buy an Xbox console and subscribe to Game Pass; subscribe to Game Pass on PC; subscribe to Game Pass on mobile; buy a copy of the game on PC. In literally all of these situations, Microsoft gets your money, while making you a revenue-generating part of the Xbox ecosystem.

the elder scrolls 6 

Thirdly – you increase the potential for console sales. Look, while there are at least some PC owners who only purchase consoles for the games they can’t play on PCs but can on those systems, the bulk of console owners buy consoles for the convenience of those platforms. They aren’t really interested in either PC gaming or mobile gaming or streaming, which is why console gaming has been able to weather the rise and success (okay, not so much for streaming, but still) of all three of those and been able to thrive even alongside them.

What this means is that the presence of The Elder Scrolls 6 on PC or mobile is rather meaningless to the average PlayStation or Nintendo player. For them, then, the only option to play the game is to buy an Xbox. Which means Microsoft still gets to potentially sell some consoles, as well as some games and/or subscriptions, to people by dangling Bethesda games as bait.

In other words, keeping Bethesda games exclusive to the Xbox ecosystem allows Microsoft to perpetuate their platform without, somehow, the traditional cons of exclusivity. They are very literally getting to have their cake and eat it too in this scenario.

But there is the case of Minecraft

The most meaningful counter-evidence to a future with potentially Xbox-exclusive Bethesda games that I have seen is the case of Minecraft. Microsoft purchased what is now the biggest game in history at the beginning of the last decade – and it was a pretty damn big game then too. However, rather than proceeding to lock Minecraft down to Xbox consoles, and use it to push Xbox that way, Microsoft chose to… do the exact opposite. Minecraft was spread to more platforms than ever before. It continued to come to PlayStation consoles, PlayStation handhelds, Nintendo consoles, Nintendo handhelds, mobiles, tablets, VR, AR, in addition to PC and Xbox platforms, of course. If Microsoft chose to keep a wildly successful multiplatform franchise multiplatform even after acquisition then, why would they not do that with Bethesda?

Well, for starters, the context is extremely different. Minecraft was a phenomenon because of its availability everywhere, which was what caused it to catch on with its primary demographic of younger players. Kids across the world could boot the game up and play it without needing to pester mom and dad to spend hundreds of dollars on a shiny new toy for them. Even an old phone would be able to play Minecraft just fine. Microsoft probably smartly realized the value in Minecraft was the brand itself, rather than its potential for the Xbox ecosystem. In other words, rather than hamstringing Minecraft to push Xbox, they chose to hamstring Xbox to push Minecraft, and history has proven that to be the right decision.

Minecraft

The nature of the Bethesda purchase is different. Given the fact that the primary demographic for Bethesda games is not kids (a notoriously fickle and fad-driven audience), but rather more engaged enthusiast fans, Microsoft knows it can bank on Bethesda fans actually spending money on Xbox to play Bethesda games. The very nature of the two purchases is different, because where making Minecraft exclusive would just have caused little Timmy to turn to playing some other game he could get on his mom’s iPad, making The Elder Scrolls 6 exclusive is not going to have that same effect, because if you’re an Elder Scrolls fan, you’re playing The Elder Scrolls 6.

In other words, trying to compare Minecraft to the Bethesda purchase makes very little sense, because the very context around the two purchases is different. Minecraft was purchased because of the potential of the brand; Bethesda was purchased because of the potential expansion of the Xbox ecosystem it can cause. One is not the same as the other, and to compare the two is fallacious. And in any case, the addressable audience for Bethesda games is still massive because they’re not just limited to selling to owners of some proprietary hardware.

In conclusion

Look, I’m not a fan of industry consolidation, and I don’t like the fact that third party developers and publishers are being acquired and purchased all around the place. But that’s what’s happening, so this is where we are. In my ideal world, Bethesda’s acquisition wouldn’t change their games coming to other platforms, but again, this isn’t about what I want. The numbers make too much sense, and based on an objective assessment of the situation, it is undeniable that it is to Microsoft’s benefit to make Bethesda titles exclusive to the Xbox ecosystem. Maybe we can see some ports of older and/or smaller Bethesda games come to Nintendo (or even PlayStation), but it makes the most sense to keep them exclusive to Xbox platforms for as long as possible.

Of course, this is just my take on the situation – Microsoft may, for example, decide that keeping the games multiplatform doesn’t hurt them, because they still bolster the Game Pass library, and having them available on the service day and date is enough incentive to get people to want to subscribe (and in the case of console-only players, to get an Xbox console to be able to subscribe). I don’t know, they are the ones running the numbers, and they are the ones who will ultimately make the decision they feel it is best to make. Based on the way I see things? It will be the smartest thing for them to do to limit the availability of Bethesda titles to the Xbox ecosystem and platform – one way or the other.

Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.


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