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Microsoft MechWarriors
January 7, 1999: 1:57 p.m. ET

Microsoft boosts its gaming division, buying FASA Interactive Technologies
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NEW YORK (CNNfn) - Microsoft gave its gaming division another boost Thursday, announcing plans to acquire FASA Interactive Technologies, developer of the popular MechWarrior series of computer games.
     Under the terms of the deal, Microsoft (MSFT) will gain the electronic rights to all of FASA's BattleTech games, which includes the MechWarrior series, which has recorded sales of more than $73 million, according to market research firm PC Data.
     "The acquisition of FASA Interactive reflects our commitment to growing our business with a smaller portfolio of top-quality games," said Ed Fries, general manager of Microsoft's games group.

Screen shot from MechWarrior 2

     FASA Interactive's development staff will be folded into Microsoft's Redmond, Wash. headquarters, where it will continue to work on future MechWarrior and other titles. The deal will not affect MechWarrior 3, which will be published later this year by Hasbro (which acquired the rights to the game when it purchased Microprose last year).
     The gaming division is a small part of Microsoft's software empire, but one that is growing rapidly. In December, Microsoft signed a partnership agreement with Digital Anvil, a new gaming and entertainment company founded by Chris Roberts, who developed the wildly successful Wing Commander series of games. The first title of that partnership is scheduled to ship later this summer.
     With its purchase of FASA, Microsoft continues the computer gaming industry's growing tradition of expansion by acquisition. 1998 was a year of tremendous consolidation for publishers and developers. Among the bigger deals were Mattel's (MAT) $3.8 billion purchase of The Learning Co. (TLC) (which had bought Broderbund Software just months earlier for $420 million), Hasbro's (HSB) $70 million buyout of Microprose and Electronic Arts (ERTS) $122 million purchase of Westwood Studios. (Financial terms of the FASA deal were not announced, but are believed to be significantly lower than these mergers.)
     1999 looks to be continuing the trend. On Wednesday, GT Interactive (GTIS) announced plans to buy developer Legend Entertainment for an undisclosed cash amount. Legend has developed a few moderate selling titles, but the real appeal of the company was its rights to create Unreal II, the sequel to the hot-selling action game Unreal. Back to top
     -- by staff writer Chris Morris


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