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Photo: Microsoft

Microsoft said Monday it would acquire ZeniMax Media, the parent company of Bethesda Softworks, one of the largest privately held game developers and publishers in the world, for $7.5 billion in cash. 

Why it matters: The deal brings an unprecedented level of gaming expertise and resources, including intellectual property, talent, and technology, to Microsoft's Xbox. It will also help further lift Microsoft's cloud gaming suite, Xbox Game Pass.

The state of play: The mega-deal is happening just weeks ahead of Microsoft's new Xbox launch in November.

  • Bethesda publishes hit games like Doom, The Elder Scrolls and Fallout. They all will be added to Xbox Game Pass, which now has over 15 million subscribers.
  • The acquisition gives Microsoft eight additional creative studio teams, growing from 15 to 23. 

The deal also presents an enormous industry challenge to Sony, which has pioneered the production of games for years, and is also set to release its new PlayStation 5 in November.

The big picture: The move comes as a cloud gaming boom is taking over tech.

  • Worldwide cloud video game revenue is expected to grow to nearly $4.5 billion USD by 2024, up from roughly $500 million in 2019, per the report.
  • Tech giants are looking to move gaming software and processing to the cloud in an effort to eliminate the need for players to buy individual copies of games and expensive specialized hardware required to play them.

Go deeper:

Go deeper

Frenetic tech giants' next trick: Learn patience and play a long game

Illustration: Annelise Capossela/Axios

In 2021, tech, an industry built on speedy change, is going to have to learn to wait.

The big picture: Every crisis tech faces — from the onslaught of antitrust litigation to the massive SolarWinds cyberattack to the pandemic's toll on health and the economy — has unfolded in slow motion and will take at least as long to resolve.

Fed chair says low interest rates aren't driving stock market prices

Jerome Powell. Photo: ANDREW CABALLERO-REYNOLDS / Getty Images

Federal Reserve chairman Jerome Powell told reporters on Wednesday that rock-bottom interest rates aren't playing a role in driving stock prices higher, while noting that vulnerabilities to the financial system are "moderate."

Why it matters: The statement comes amid unshakeable stock prices and a Reddit-fueled market frenzy — prompting widespread fears of a bubble and the role monetary policy has played in that.

2 hours ago - World

Biden freezes U.S. arms deals with Saudi Arabia and UAE

Trump struck several large arms deals with Mohammed bin Salman (L) and Saudi Arabia. Photo: Kevin Dietsch-Pool/Getty Images

The Biden administration has put on hold two big arms deals with Saudi Arabia and the United Arab Emirates which were approved in the final weeks of the Trump administration, a State Department official tells Axios.

Why it matters: The sales of F-35 jets and attack drones to the UAE and a large supply of munitions to Saudi Arabia will be paused pending a review. That signals a major policy shift from the Trump era, and may herald sharp tensions with both Gulf countries.