Report: Microsoft and Obsidian are Close to Finalizing an Acquisition Deal

In a recent report by Kotaku, Obsidian Entertainment may be the latest in a recent string of studio acquisitions from Microsoft Studios.

on October 9, 2018 3:26 PM

Publication Kotaku reported earlier today that Microsoft is finalizing a deal to acquire Obsidian Entertainment, creators of Fallout: New Vegas and Star Wars Knights of the Old Republic II. Speaking to sources that have not been verified by DualShockers, multiple persons who have reportedly been briefed on the negotiation had mentioned to Kotaku that the meetings were taking place and that it’s “a matter of when, not if.”

Responding to these rumors, a Microsoft PR representative stated “We do not comment on rumors or speculation.”

In a far more entertaining demeanor, Obsidian’s PR representative Mikey Dowling had this to say:

Unfortunately, we don’t comment on rumors or speculation other than to say that the Rumors album by Fleetwood Mac still holds up.

While rumors of purchases and acquisitions are standard fare in the gaming industry, the recent history of both companies offer more credence to this report. Microsoft Studios announced their acquisition of four existing studios at E3 2018, in a new business strategy gearing up for the next generation. While this is likely a large investment, Microsoft Studios’ head Matt Booty affirmed to GamesIndustry.biz that they are still looking for more acquisitions:

“I don’t want to seem like we’re going out to fill a quota. It’s not about filling a spreadsheet by any means. We will, however, have an interest in studios right now that fit this criteria of 50 to 100 people, who are making games on a two to three year cadence, and have content that we think will be of interest to our Game Pass subscribers. That means content that is a little different to what our big AAA franchises can deliver.”

Apart from Microsoft’s shopping around of studios, Obsidian hasn’t been quiet on that front either. Ever since the cancellation of Stormlands, ironically an Xbox-exclusive RPG that was rumored to be a premier RPG for the then-upcoming Xbox One, Obsidian has had notable financing issues. Despite overwhelming critical success, Obsidian Entertainment has frequently turned to crowdfunding outlets like Kickstarter and Fig to fund their successful series Pillars of Eternity.

Even more notable, Feargus Urquhart–CEO of Obsidian Entertainment–was surprised that the company had not been acquired yet. In a separate GamesIndustry.biz interview, Urquhart was asked what surprises him most about Obsidian’s trajectory since it was founded:

I thought we would have our own engine at this point – and we tried. I thought we would have been purchased by now. I thought we wouldn’t be as big as we are.

When asked to clarify that point, Urquhart had this to say:

I am fine being independent in 13 years. I would be okay if we got purchased, but I would be fine independent.

To reduce the point, Microsoft is looking to pick up studios which fill a niche their exclusive lineup is missing and Obsidian is looking for financiers to back their projects, while not totally objecting to the idea of an acquisition.

Without further confirmation from either Microsoft or Obsidian, it is impossible to say whether this deal is actually going down or being finalized–so take this news story with a grain of salt. However, if true, Microsoft Studios is continuing to bolster what will likely be a strong list of first-party games.

 /  Editor-in-Chief
Lou Contaldi is the Editor-in-Chief at DualShockers, specializing in both reviews and the business behind gaming. He began writing about tech and video games while getting his Juris Doctor at Hofstra University School of Law. He is maybe the only gaming journo based in Nashville, TN.