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Xbox head Phil Spencer on the $7.5 billion deal to buy Bethesda parent ZeniMax

Phil Spencer, head of Xbox at Microsoft, joins "Squawk Alley" to discuss the company's acquisition of ZeniMax, the parent of popular video game publisher Bethesda. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

Microsoft announced Monday that it will buy ZeniMax Media, the company that owns well-known video game publisher Bethesda, for $7.5 billion in cash.

It’s the biggest gaming acquisition in Microsoft’s history. The company bought Mojang, the studio behind popular title Minecraft, for $2.5 billion in late 2014. That proved to be a boon to the firm as Minecraft continued to surge in popularity, rapidly becoming the world’s best-selling game with over 200 million copies sold to date.

The acquisition of Bethesda gives Microsoft access to a raft of successful game franchises, including the role-playing game series Fallout and The Elder Scrolls and the Doom shooter franchise.

“Gaming is the most expansive category in the entertainment industry, as people everywhere turn to gaming to connect, socialize and play with their friends,” Microsoft CEO Satya Nadella said.

“With the addition of Bethesda, Microsoft will grow from 15 to 23 creative studio teams and will be adding Bethesda’s iconic franchises to Xbox Game Pass,” Microsoft said. “This includes Microsoft’s intent to bring Bethesda’s future games into Xbox Game Pass the same day they launch on Xbox or PC.”

Microsoft’s Xbox unit is betting heavily on subscriptions this year. Its Xbox Game Pass platform gives players access to dozens of games and the firm recently included a so-called cloud gaming feature that lets users play games on their phone or tablet. Microsoft said it aims to bring Bethesda’s upcoming space-themed game Starfield to Xbox Game Pass on the day of launch.

Microsoft is also selling its new Xbox Series X and Xbox Series S consoles — which will go head-to-head with Sony’s PlayStation 5 next month — via point-of-sale financing plans to spread the cost over monthly installments. Preorders for both systems start on Tuesday.

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