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Official art for Obsidian’s Pillars of Eternity II: Deadfire. (Obsidian press kit)

This weekend marked Microsoft’s X018 conference, the fourth-annual showcase for the Xbox family of products, held in Mexico City. A lot was announced, including an upcoming expansion for Forza Horizon 4, but the biggest story of the show was that Microsoft has acquired the independent studios Obsidian and InXile. Both studios are legendary within the video game industry for making big, immersive, and popular role-playing games like Wasteland 2, The Bard’s Tale, Fallout: New Vegas, and Pillars of Eternity.

On Microsoft’s side, this puts two veteran studios in the company’s portfolio, which offers the prospect that the next couple of big computer role-playing games (CRPGs) could be exclusive to Microsoft platforms. This is especially useful as talk has recently begun to spin up concerning the next generation of console hardware, with rumors of a new Xbox coming in 2020.

If both Obsidian and InXile make new Microsoft-exclusive CRPGs, it would be a big feather in the company’s cap going forward, particularly in the enthusiast market and press.

Financial terms of the Obsidian and InXile acquisitions weren’t disclosed. The deals are the latest in a string of recent acquisitions by the Redmond-based tech giant, focused largely on games, artificial intelligence and developer tools. Even before these latest deals, Microsoft’s fiscal 2019 already ranked as its fifth-biggest year for acquisition spending since 2003, according to a GeekWire analysis of the company’s annual regulatory filings.

For Obsidian and InXile, both studios have recently been reliant on crowdfunding campaigns in order to make their games, and crowdfunding tends to be driven by the nostalgia market. Access to Microsoft’s funding could allow both companies to explore new intellectual properties, take their time with new projects, and work with more flexible budgets. (You could draw a parallel between Obsidian/InXile and the Seattle-based Harebrained Studios, which was in a similar boat until its acquisition by Paradox earlier this year.)

Obsidian Entertainment was founded in 2003 in Irvine, California by veterans of the then-recently-shuttered Black Isle Entertainment, a division of Interplay. While working at Black Isle, the Obsidian team was responsible for some of the most popular CRPGs of the late 1990s and early 2000s, including Fallout, Baldur’s Gate, Planescape: Torment, and Neverwinter Nights.

As an independent developer, Obsidian’s first big project was 2004’s Star Wars: Knights of the Old Republic II. Since then, the company has done work-for-hire in several major franchises, such as South Park and Fallout, before becoming one of the first big crowdfunding successes in gaming with its throwback series Pillars of Eternity.

InXile Entertainment was founded in 2002 by Brian Fargo, one of Interplay’s co-founders, after his departure from the company; InXile’s name is taken from a joke he made for an E3 badge about being Interplay’s “leader in exile.” The new company’s first title was 2004’s The Bard’s Tale, an action-RPG that gently mocked the conventions of the genre and starred Cary Elwes as the voice of its main character.

After making Hunted: The Demon’s Forge for Bethesda, InXile got back on the industry’s radar by revisiting the old post-apocalyptic Wasteland franchise, using money from a successful Kickstarter to make 2014’s Wasteland 2, which was recently ported to the Nintendo Switch. InXile currently maintains studios in Newport Beach, Calif. and New Orleans, La., and is currently working on Wasteland III.

Other big announcements that came out of X018 include:

  • “Fortune Island,” the new expansion for the Microsoft-exclusive racing game Forza Horizon 4, which brings players to the stormy northern British Isles on December 13th;
  • All Microsoft Game Pass holders receiving a copy of the smash hit PlayerUnknown’s Battlegrounds on November 12th;
  • New content packs coming for State of Decay 2 and Sea of Thieves; and,
  • The official debut of Void Bastards (no, really, that’s the actual title), a bizarre strategy-based first-person shooter from one of the co-founders of the late Irrational Games, makers of the BioShock series.
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