Microsoft's Xbox Division Reportedly Close To Acquiring Obsidian Entertainment

The reimagining of Microsoft’s Xbox gaming division continued on Tuesday. The tech giant is in talks to buy Obsidian Entertainment, a long-lasting and well-regarded independent video game developer, Kotaku reported.

According to Kotaku’s sources, the deal is mostly done and in the process of being finalized.

It is not yet known how much Microsoft will pay for the studio. For Obsidian, the acquisition would likely mean more stability and bigger budgets, but could also result in less autonomy as a studio. For consumers, the deal means Obsidian’s future output would be exclusive to Xbox consoles and Windows PCs.

When reached by Kotaku, neither Microsoft nor Obsidian would comment.

Founded in 2003, Obsidian has released a steady stream of narrative-driven and complex role-playing games over the years. Many games — titles include “Star Wars: Knights of the Old Republic II,” “Alpha Protocol” and “Fallout: New Vegas” — have received cult followings or critical acclaim.

Still, the company struggled with financial security in the same way as many independent development studios. Obsidian relied on a Kickstarter campaign to stay afloat in 2012.

Obsidian would not be the first notable Microsoft acquisition of 2018, but it would be the biggest. Earlier this year, Xbox head Phil Spencer announced that it had bought “Forza Horizon” developer Playground Games and “Hellblade: Senua’s Sacrifice” developer Ninja Theory to bolster its in-house development portfolio. Microsoft also owns “Minecraft” developer Mojang.

The Xbox One has been significantly outsold by the PlayStation 4 since both consoles launched in 2013. A higher initial price point and a perceived lack of compelling games over the years put it firmly in second place. Spencer took charge of Xbox in 2014 and since then, Microsoft’s gaming division has focused more heavily on subscription services and acquiring studios.

For example, Xbox Game Pass gives subscribers access to an expanding, Netflix-like library of games for $10 per month. Xbox All Access, meanwhile, will give subscribers an Xbox One console and subscriptions to Xbox Live and Game pass for a larger monthly subscription. Microsoft reported growth in gaming revenue earlier this year, thanks in part to the shift to services.

Microsoft also recently announced a new game streaming service called Project xCloud, using Microsoft’s Azure cloud architecture.