Microsoft acquiring Bethesda gave Google cold feet about Stadia games business

Search giant talked up how well everything was going just five days before announcing it was closing its first-party studios

Microsoft acquiring Bethesda gave Google cold feet about Stadia games business

Xbox's $7.5 billion potential acquisition of Bethesda parent company ZeniMax was apparently partly to blame for Google deciding to close its Stadia studios.

That's according to Kotaku, which reports that the head of Google's games business Phil Harrison (pictured) held a Q&A with staff in the wake of the news that it was shutting its first-party developers, during which he said that Microsoft's studio spending spree was part of the reason for the search giant deciding to pull out of making games.

Microsoft buying development companies isn't really anything new and – to be honest – sounds like a bit of a bullshit excuse. The tech giant has been snapping up studios left and right since 2018, long before Google announced that it was getting into go games, though the Bethesda deal is the largest acquisition by some margin.

Shutting down

The news that Google was shutting its Stadia Games and Entertainment (SG&E) first-party development capability also apparently came just five days after Harrison praised the progress that its developers were making.

“[Stadia Games and Entertainment] has made great progress building a diverse and talented team and establishing a strong lineup of Stadia exclusive games,” Harrison’s apparently said in an email to staff sent on January 27th.

“We will confirm the SG&E investment envelope shortly, which will, in turn, inform the SG&E strategy and 2021 [objectives and key results].”

Harrison reportedly told staff that management knew they were closing down Stadia Games and Entertainment when he sent that email, too.

“I think people really just wanted the truth of what happened,” one source told Kotaku. “They just want an explanation from leadership. If you started this studio and hired a hundred or so of these people, no one starts that just for it to go away in a year or so, right? You can’t make a game in that amount of time...We had multi-year reassurance, and now we don’t.”

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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.