Microsoft's studio spending spree continues: Big M to acquire RPG specialists Obsidian and inXile

Date Type Companies involved Size
November 11th, 2018 acquisition inXile Entertainment
Obsidian Entertainment
Xbox Game Studios
Not disclosed
Microsoft's studio spending spree continues: Big M to acquire RPG specialists Obsidian and inXile

Rumours is indeed still a classic album- Microsoft's spending spree, which began at E3 this year, was from finished.

At the firm's X018 event in Mexico, the Big M announced its intention to purchase both Obsidian Entertainment and InXile Entertainment.

Rumours about the former broke earlier in the year. Obsidian is, of course, famous for working on RPGs including Star Wars: Knights of the Old Republic, South Park: The Stick of Truth and Fallout: New Vegas for publishers EA, Ubisoft and Bethesda, respectively. More recently, the Irvine, California-based firm is better known for its series of crowdfunded RPGs Pillars of Eternity.

The reason why Obsidian turned to Kickstarter to make future titles was, of course, that the firm was working on an RPG for Xbox One codenamed North Carolina which Microsoft cancelled for a relatively small "kill fee". Around the same time, the firm was smarting from not receiving its bonus from Bethesda for New Vegas after the firm set this against the game's Metacritic score - something that the studio missed out on by one point. If that wasn't enough, the company was caught in the blast radius of publisher THQ going bust, making the future of its South Park RPG The Stick of Truth uncertain.

All of which is to say that Microsoft will likely have had to work pretty hard to get Obsidian to work in the triple-A sector once more. Or just told them how many 0s that massive pile of money on the table had.

Microsoft's other purchase was InXile, another RPG specialist founded by veterans of Interplay that in recent years has turned to Kickstarter to fund its releases with Wasteland and Torment: Tides of Numenera.

While both of these developers have worked on console titles in the past, their heritage is unmistakably on PC meaning these acquisitions are an insight into Microsoft putting more of a focus on this platform moving into the next console generation.

In addition, these are an indication that the Big M is recognising the potential for niches in the games market right now. Historically, the Xbox firm's first-party line-up has been a bit more bombastic with IP like Gears of War and Halo. They will also bring RPG players into the Microsoft ecosystem. 

These are just the latest investments that Microsoft has made in its first-party line-up. At E3 this year, the firm revealed that it was buying Hellblade maker Ninja Theory, Playground Games and Undead Labs - the makers of the Xbox-published Forza Horizon and State of Decay series respectively - as well as Compulsion, of We Happy Few fame.

The publishing giant also set up a brand new developer in Santa Monica called The Initiative, headed up by Crystal Dynamics vet Darrell Gallagher with vets of Respawn, PlayStation, Riot and Rockstar coming on board since.

Speaking to in the wake of this raft of announcements, CVP of Microsoft Studios Matt Booty said that it was interested in mid-tier developers moving forwards, words that have certainly proved to be true with this latest announcement.

"Having a collection of dedicated first-party game development studios is a powerful and unique asset," he said at the time.

"We are the first to implement new technologies, the first to deliver content for new platforms, the first to explore new business models. It enables us to build a portfolio of exclusive games, and this was the right time to increase that investment. It is also interesting to observe the changes in the industry.

While the industry is growing across the board, there seems to be fewer teams and studios focused on 'mid-tier' games that sit between triple-A blockbusters on one end and smaller indie games on the other. Those are some of the kinds of studios that we're interested in partnering with right now, studios with teams that can make quality, crafted games that sit just between mid-tier and triple-A and by becoming part of our Microsoft Studios family, can focus on craft and innovation and accelerate their creative growth."

In an interview with Polygon, Booty said that this round of acquisitions was not a "bingo card" - but the firm certainly has improved it RPG street cred with these new deals.

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.