Microsoft Insider Reveals Truth Behind Bethesda Closings

Many were baffled when Microsoft shut down some Bethesda studios and combined others, which will result in plenty of layoffs. Now, someone with knowledge of the situation is letting people know what really happened. Brian Hilderbrand, the senior public relations manager at Microsoft, wrote a detailed post explaining the situation, and he points the finger squarely at Game Pass (a subscription service that allows subscribers to play games without buying them) and Xbox’s acquisition of Activision. Essentially, Game Pass cost Xbox a lot of money on their games because people subscribed to the service and played games that way instead of buying them, saving themselves a lot of money and costing Xbox and Microsoft a bundle. Meanwhile, Xbox spent over $70 billion acquiring Activision and Bethesda – $68.7 billion for the former, $7.5 billion for the latter – which it then had to recoup for Microsoft, and which it hasn’t, in large part because of the revenue lost through Game Pass. Now, Xbox has to make cuts to stop the bleeding. You can read the whole post below, courtesy of Grummz, aka Mark Kern:

Now, it’s fortuitous that Grummz shared this. As a series of reposts reveal, he’s been saying for some time that Game Pass would be a problem for Microsoft and Xbox in the long run for this exact reason and would be even worse for gamers, who would get hit with “in-game purchases” and the like to offset the lost revenue.

Amusingly, Grummz was called out by a games journalist, Garret Atkins, the editor-in-chief of VGT: Video Games Tracker, who claimed the former Blizzard producer was either lying or didn’t know enough about the subject. Yep, a games journalist told someone who worked extensively in the video game industry that he knew more about the video game business than the professional did. To the astonishment of exactly zero people, Atkins’ comment appears to have been deleted, but Grummz has a screenshot:

The similarities to Disney are hard to ignore; the two companies went on, as Hilderbrand puts it, “a buying spree” and found themselves (albeit for different reasons) unable to make back the cost of their acquisitions. Now, in Xbox’s case, a lot of people are going to lose their jobs because games that may otherwise have been successful tanked. Since someone working for Microsoft is saying this publicly – and it’s the head of PR, so I don’t think he’d be saying this if Microsoft didn’t want it out there – I wonder if they’re laying the groundwork for getting rid of or significantly altering Game Pass. If it’s costing them this much money, it may be inevitable.

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