Microsoft Purchase of Bethesda Delayed by Lawsuit… by Fallout 4?

The landmark $7.5 billion sale of Bethesda to Microsoft has been put on hold because of a class action lawsuit over alleged false advertising. In July 2019, the X-Law Group had filed a suit against Bethesda for the marketing of Fallout 4’s DLC Season Pass and the suit is seeking over $1 billion in damages.

The Group has reportedly filed discovery documents. This could block Microsoft’s purchase of Bethesda if the sale would mean that the company would be able to shift its assets to a new legal entity and gain protection from any liabilities. If this suit goes to trial, it may not be resolved until next year. This would throw a real monkey wrench into Microsoft’s plans, as the tech giant had been hoping to acquire the studio this year itself.

What we’re going to try and do is go in and ask a judge to stop the sale between Microsoft and Bethesda to preserve the assets and it’s known as a motion for preliminary injunction.

X-Law Group

The lawsuit claims that Bethesda claimed people who purchased the Fallout 4 Season Pass would be entitled to “all of the Fallout 4 DLC we ever do” for the fee of $30.

Based on what we did for Oblivion, Fallout 3, and Skyrim, we know that it will be worth at least $40, and if we do more, you’ll get it all with the Season Pass.

Bethesda

However, in June 2017, Bethesda announced its Creation Club which was described as a collection of all new content for Fallout 4 and The Elder Scrolls V: Skyrim. This Club had been created by Bethesda Games Studios as well as external partners. Season pass owners were not given access to the Creation Club and were required to purchase it separately.

The members of The X-Law Group argued that this content is also considered as DLC and should be available to Season Pass holders without any additional fees.

It clearly is downloadable content. It walks like a duck, quacks like a duck. So it is DLC. They try to slap a sticker on it and call it Creation Club content to remove it from the purview of the people that had already bought the Season Pass. But that’s artificial in nature. And it’s part of the fraud.

Filippo Marchino, Attorney, The X-Law Group

The lawsuit charges Bethesda with breach of contract, unjust enrichment, deceit or fraud, fraudulent concealment, negligent misrepresentation, and tort arising out of breach of contract, among other claims. The company’s counsel has rejected that the Creation Club content is DLC.

The plaintiffs are looking to recover the economic losses and damages incurred, including the $281 in DLC content, along with punitive damages, legal fees, pre- and post-judgement interest. It is estimated that four million players could also be entitled to compensation, which could total to $1.1 billion dollars in damages. This amount could then be multiplied if punitive damages are also awarded.

However, there is a good chance this case will be settled before it is taken to trial as neither party would want to go to court.

I just can’t imagine a judge ordering, or even a jury, really, approving the award of billions of dollars with respect to virtual downloadable content. It seems like the easiest thing to do would be to open up the Creation Club to everyone who bought the season pass.

David Hoppe, Attorney in the games industry