Todd Howard: "The next generation is about access"

Microsoft's acquisition of Bethesda parent ZeniMax Media came as a surprise to most of the industry -- including, according to Elder Scrolls and Fallout director Todd Howard, a lot of people at the company.

At over 2,000 employees, the developer and publisher is perhaps Xbox's largest purchase to date. It ends Bethesda's decades of independence, although Howard tells us the deal doesn't actually close until next year "so there's some time before it feels real."

"Once the shock wore off, there was just huge excitement given the relationship we've had [with Microsoft] and what the road looks like ahead -- not just for us but the gaming industry," he says of the internal reaction to the news.

"We're very much aligned, and have been for a long time, with the same vision as to where gaming is going and how we can be ambassadors and drive that forward."

"I grossly underestimated the impact [of the acquisition] in the larger gaming community"

Howard is speaking to us ahead of his Develop:Brighton 2020 keynote next week, which will be hosted by GamesIndustry.biz. This hour-long session will explore the director and executive producer's 26-year career as he prepares to receive the Develop Star Award, so naturally our one-on-one conversation focuses primarily on the biggest games acquisition news of 2020.

In addition to the overall shock, external reactions ranged from Elder Scrolls fans committing to getting an Xbox out of fear that PlayStation may no longer receive Bethesda games, to a campaign urging Sony to acquire Konami as some sort of counter-attack. As daft and perhaps unreasonable as these reactions might seem, it speaks to the magnitude of the deal -- something Howard didn't fully appreciate being so "in the weeds" on actually arranging it.

"I grossly underestimated the impact in the larger gaming community," he says. "I was naively surprised at how big it landed and what it meant in the larger context of games, but I was happy with the feedback we saw. A lot of people saw it as a big positive thing, the same way we do."

There were also industry critics who, while intrigued by the acquisition, also expressed concerns around industry consolidation, observing that larger companies merging is not always a positive trend in the long run. Howard, however, does not share these concerns, and points to the long history between Microsoft and Bethesda as indication that this is a more fitting partnership than some people might think.

"I don't know that it portends some other big consolidation. In other industries, that happens from time to time," he says. "All of the games I've done we've partnered with Microsoft in some way. So as we come to Starfield and Elder Scrolls 6, I guess this is partnering in a bigger way."

Compared to Microsoft's numerous other acquisitions over the last few years, Bethesda still holds a degree of autonomy. At the time, Bethesda's Pete Hines said the company will still be publishing its own games -- a stark contrast to Double Fine Productions, which, according to Gang Beasts developer Boneloaf, is winding down its own publishing operations now it's part of Xbox Game Studios.

This perhaps explains what Howard means when he tells us Bethesda is "giving up very little," adding: "[Microsoft is] very creator-driven, we're still going to get to be who we are. We're a subsidiary, but we're still running our games and pushing everything the way that we have.

"We felt very strongly about their view of access; games for everybody that we can bring to anybody regardless of where they are, what devices they're playing on. We're very, very passionate about that, and at the end of the day we're convinced we'll make better products and get them to more people easily by being part of Xbox as opposed to being just a third party."

"The next generation is about bringing access to games to everybody, no matter where they are in the world or what devices they like to play"

As with all acquisitions Xbox has made in the past couple of years, it's hard not to imagine that it's been at least partially driven by the desire for must-have content on Game Pass, its disruptive and rapidly growing subscription service. Indeed, Microsoft has already confirmed that new Bethesda titles -- including Starfield and The Elder Scrolls 6 -- will be available through Game Pass at launch.

But it's the potential for the rest of ZeniMax's IP that is perhaps most intriguing. Franchises like Prey and Dishonored are both understood to be on hold having struggled to meet sales expectations -- despite critical acclaim for their most recent outings. But Game Pass is about delivering a variety of content that people want, not just raw sales. Even id Software co-founder John Carmack commented at the time that the deal may lead to the revival of older franchises.

Howard certainly sees an opportunity: "Game Pass and things like it allow titles to be successful where the economics of the business, and having to sell things at retail to sell X amount of copies... That works against some games. Just like in other avenues -- let's take television or movies. Certain types of comedies or big budget dramas went away. TV went to the cheapest thing they could make for a long time, reality television, which I could equate to a free-to-play match-three game. What brings eyeballs? What's cheap? Right, let's get it out.

"Subscriptions came along and now you see the quality and investment in dramas or historical fiction series. That's where creators are able to go and create these things people want and it makes sense for everybody: the people paying the bills, the people creating it and the people consuming it. That's what we see happening with games with things like Game Pass.

"The IPs you mentioned -- I can't speak to the ones I don't personally work on -- or even other people's... But take classic adventure games, they now have real life inside a service like that. Those are games that really don't make a lot of economic sense at $60, or maybe even at $30 if someone's going to play it for five or six hours, but in a system like that it makes complete sense. It drives a lot of people saying 'Hey, I got to experience that and I wouldn't have any other way,' and the creators got to make it without the burden of 'Will this be successful? Will we get to make another one?'

"I'm extremely optimistic about what something like Game Pass brings, not just to people playing it but to creators being unbridled in terms of what they can create."

"All of the games I've done we've partnered with Microsoft in some way. So as we come to Starfield and Elder Scrolls 6, this is partnering in a bigger way"

The implication is that the subscription services like Game Pass could move the industry away from using sales figures as the core metric for success -- something certainly in line with Microsoft's strategy, having not released sales figures for the Xbox One in several years. All other forms of entertainment have been shifting towards subscriptions, and Xbox's focus on Game Pass certainly suggests the platform holder is pushing for an industry where day one or week one success is less important than it was previously. But Howard believes there's a balance to strike.

"I don't think there's one way, and there never should be one way, of gauging success," he says. "Going back to TV and movies, there are certain ones of those that are going to go to the theatre -- things like Avengers. Then they're going to come to rental, and eventually to some sort of subscription or streaming service. And then there are the ones that go straight to television and have ads, and they're successful that way.

"My hope -- and you're seeing it happen, which gives me great joy -- is that all of those avenues are starting to be successful. It's the subscription and streaming ones that gaming hasn't had, and it's coming now and very quickly being proven successful, but that doesn't mean the other ones should or will go away.

"The next generation, the next five or ten years, is really about bringing access to games very easily to everybody, no matter where they are in the world or what devices they like to play."

This is certainly a leaf out of the Microsoft playbook, which has been positioning Xbox as more of a games ecosystem than a platform in the traditional sense. Game Pass subscribers are able to access a library of games -- including all first-party titles, which Bethesda's games will be when the deal closes -- through their Xbox console, PC, or even other devices via its Project xCloud streaming technology. Cloud saves mean players continue where they left off, no matter which device they shift to next.

Microsoft is one of several companies pushing in this direction, with Google driving its Stadia service and Amazon recently announcing its own cloud gaming offering, Luna. Even main rival Sony has the PlayStation Now service, built on cloud gaming pioneer Gaikai, which it can mobilise when needed.

For Howard, this represents a much more interesting future for games, rather than constantly striving for beefier hardware to power shinier graphics: "People always chase that, and that's going to open up some things like scale and fidelity. But if you cast back over games, the fidelity part doesn't move the needle in terms of how people feel about gaming. The ease of access [does].

"Over the next five years [streaming is] going to become more and more popular, and after that maybe it's the main way people play"

"There might be games you want to try where just the time it takes to install it, set up a thing, do X, Y and Z -- that limits your access. That's friction to you trying something, and trying it now. Being able to quickly get into your games and try something... Streaming has that ability, and on any device that's where it's opening [up] access, as opposed to a clock cycle-type, graphical fidelity bump.

"If I see something like Untitled Goose Game, that looks like you should be able to jump right in. But maybe you've got to get back home, then you've got to download it, and by then maybe you've forgotten. Or if your friends are playing something, 'Hey, join me, join me now.' Well, are they going to play tomorrow? It's a very solvable problem. I'd say it's virtually solved; it's just a bandwidth access issue, that a lot of hardware and some good software is going to make even better."

The biggest obstacle, of course, is infrastructure. As Stadia has demonstrated, access to frictionless cloud gaming depends on where you are in the world, the strength of your broadband connection, and myriad other aspects of a system so heavily reliant on the internet.

But, as Howard observes, the same was true for movies when they first started streaming. And, as with the need for multiple metrics of success, there will always be the need for multiple distribution channels. Some users will always prefer to download a game or purchase the disc in order to run it natively. Others may favour a combination, with an app that handles some of the work -- such as interface or effects -- to reduce the amount of data being streamed.

"There's lots of flavours of it, and I think over the next five years [streaming is] going to become more and more popular, and after that maybe it's the main way people play," says Howard.

"Game Pass and things like it allow titles to be successful where the economics of the business, and having to sell things at retail to sell X amount of copies"

Despite the many entry points to the Xbox ecosystem, there are still concerns that all future Bethesda titles will be restricted to channels the Microsoft controls. Xbox boss Phil Spencer said at the time that Bethesda's games continuing to be multiformat will be judged "on a case-by-case basis" -- and Howard reiterates that the details of the deal are still being finalised. When it comes to such releases, he says, "We haven't gone through all of that, to be honest."

"We do view it, and always have by ourselves, on a case-by-case basis," he says. "We'll do that as part of Microsoft as well. They've been pretty open on other platforms and not just within Xbox. This is an outside perspective, but if you go back ten years at Microsoft, you wouldn't expect them to have a full Office suite on an iPhone either.

"I can't really project where things will be except to say we've done those sort of exercises ourselves as an independent. If you look at every Elder Scrolls game, there has been some exclusivity on Xbox or with Microsoft. We've partnered with every game. Morrowind was basically a console exclusive, Oblivion was a long timed exclusive, Skyrim's DLC was exclusive for a long period of time. We'll decide what makes the best sense for our audience when the time comes, and I can't really project today what that looks like."

Microsoft has already said it will honour the previous PlayStation exclusivity deals for Ghostwire: Tokyo and Deathloop, and has shown over the years it's not averse to some Microsoft-owned titles releasing on other platforms. Minecraft is perhaps the most obvious example, but even the Ori titles and Cuphead made it to Nintendo Switch.

Ultimately it's hard to imagine that, despite the power Microsoft now has over Bethesda, it could restrict The Elder Scrolls 6, for example, to its own platforms -- especially given the running joke that its forebear Skyrim is available on every device imaginable, including Alexa.

"I would agree that is hard to imagine," Howard smiles, but offers no more on the matter.

We'll have a full write-up of the highlights from the keynote session with Howard on Monday, November 2.