Pete Hines left Bethesda because the studio is now part of something that isn't 'authentic or genuine'

Pete Hines delivers a candid and rare look at the goings-on within Bethesda before his departure, hinting that turmoil may have happened following Microsoft's acquisition of the company.

Bethesda has changed considerably over the years, especially after Microsoft's $7.5 billion buyout following the passing of ZeniMax chief Robert Altman. Microsoft bought the studio in 2020, and after that, things became a bit frictional and confusing within the group, especially concerning Microsoft's flip-flop plans on exclusivity. This, and potential schisms with Game Pass, may have led to the departure of one of Bethesda's most well-known and dedicated executives, Pete Hines.

In a recent interview with Kirk McKeand's new Firezide Chat newsletter, Bethesda's former VP of marketing Pete Hines explained why he left the studio after 24 years. In a nutshell, Hines says that Bethesda is now a part of something that just didn't feel right to Hines--it wasn't authentic or genuine anymore.

Since this is such a rare event, this will be a longer article because we're going to tie in some things about the FTC v Microsoft trial from 2023 to add critical context.

Hines joined Bethesda in 1999, and left in 2023, shortly after Starfield's release. That's 24 years with Bethesda, decades with Todd Howard, and many, many years putting together an all-star marketing team to help lead the charge.

"When I joined in '99 Zenimax had just bought Bethesda earlier that year, and basically was attempting to bring them out of the mom and pop era. But in those early days, my first six years at Bethesda, I was kind of the whole [marketing] department," Hines said.

Hines was there when Morrowind saved the company, he saw Oblivion push the boundaries and then celebrated alongside the studio when they hit it big with Skyrim. But things changed over the years, and while Hines won't come out and say it's because of the Microsoft acquisition and having to answer to a corporate overlord after spending decades as an independent organization, testimony during the FTC trial coupled with Hines' comments about Game Pass seem to indicate that this could be a major reason for his departure.

Uncle Pete says that he stayed with Bethesda because the group still needed him, but it was clear that the company he had spent decades helping build was no longer the same.

Hines indicates that Bethesda's efficiency as a developer and a publisher was impacted at some point, but eventually, he could no longer do what he thought needed to be done. The organization was changing in a way that he didn't like, and he felt he couldn't protect his workers.

That last part could be a nod to the disastrous layoffs at Xbox that affected Bethesda's teams, disrupting and breaking apart tight-knit groups of people who had been working together for years. It led to the cancellation of major new games like ZeniMax Online's unannounced MMORPG, which led to the departure of the studio's founder Matt Firor, who had been with the company for 20+ years.

"I was staying there because this place still needs me. I just hit a point of yes, it needs me, and I am powerless to do what I think needs to be done to run this place properly, to protect these people, to maintain what we worked so hard to create, which is an incredibly efficient, well run video game developer and publisher," Hines said.

"And when I was unable to do what I thought my job should involve in continuing to have that place be, you know, if not the most efficient publisher in the game industry, it was way [up there]."

Hines knew it was time to go once he realized the Bethesda he knew was, in his eyes, being mistreated.

He didn't elaborate on this, but it could have something to do with Microsoft's mandate to launch all new games into Game Pass, which changes the financial outlook for all first-party studios, adding more potential volatility to performance. Bethesda had shifted more towards a service-oriented company with Elder Scrolls Online and Fallout 76, but overall the studio still relied heavily on game sales--a fact that is reiterated by how many times the group re-releases its games over the years.

"When I couldn't protect it, and I saw how it was getting damaged and broken apart and frankly mistreated, abused, whatever word you want to use, I said I am not going to sit here and watch this happen right in front of me."

Hines goes on to discuss Bethesda becoming a part of something disingenuous, which is an interesting phrase, because as we know, Microsoft seemed to go back and forth regarding Starfield's exclusivity. Hines has also been quite vocally outspoken about Xbox Game Pass, saying that it can create "tension" among devs who face the harsh new realities of the Game Pass model, a semi-mysterious billion-dollar ecosystem that seems to reward developers based on playtime.

During the FTC v Microsoft trial, we learned about the ins and outs of Bethesda, and how ZeniMax is a limited-integration company under the Xbox division. That means that ZeniMax still operates as its own unit, but Xbox's CEO calls the shots, including any decisions around content exclusivity. This was a big deal at the time because no one could tell for sure if Starfield, and other Bethesda games, would be exclusive to Xbox.

It's also important to note that Xbox has changed CEOs since the buyout, with Phil Spencer now retired and Asha Sharma currently leading Xbox. Sharma now has the kind of discretion to greenlight and/or cancel games that is talked about in this report.

Hines gave testimony during the FTC trial, discussing the merits of exclusivity. At the time, Hines said that exclusivity reduces development time and can make things more efficient.

"Todd has called Starfield an irresponsibly large game. Focusing on fewer platforms has been a big benefit to that team," Hines said during the 2023 trial.

"You go to fewer platforms, your development gets more streamlined. It just needs to run as well as possible on one box, on PC--you know, a narrow focus always helps."

The trial revealed inconsistencies around Xbox's idea of exclusivity. It was shown that Indiana Jones had been marked as a multi-platform game before Microsoft acquired ZeniMax, and then after the buyout, that game was then made exclusive. As we now know, exclusivity is gone for good at Xbox as the company seeks to push game sales on competing platforms.

Going back and forth on these things, coupled with the potentially difficult new economics of Game Pass, may have been part of what Hines is referring to when he discusses disingenuous practices.

The FTC trial also revealed that Microsoft had put together a so-called Neutrino Model that plotted out the effects of exclusivity on Bethesda games. This was part of the valuation model that Microsoft prepared to the board of directors before the ZeniMax acquisition was greenlit.

In the testimony, Xbox chief financial officer Tim Stuart was asked if Starfield was exclusive, and Stuart said yes. This has obviously changed as Starfield just released on PlayStation 5.

In the Neutrino Model, Xbox's CFO and marketing team calculated how much money Starfield may lose out on if it were made exclusive to Xbox. The idea was to make up for that shortfall in sales over time through value creation across the Xbox ecosystem in a 10-year period, but the specifics on how this would be achieved remain vague, presumably being based on the assumption that Game Pass subscribers would increase to help offset sales losses.

Below is a snippet from Xbox CFO Tim Stuart's testimony during the trial:

Q You recall that you discussed at the GLT this gap that this scenario could create?

Yeah

Q Starfield is exclusive?

Yes

Q Despite launching Starfield as an exclusive, you believe that Microsoft can still meet its commitment to the board?

Yes

Q Part of that is because that is a 10 year model and you have time to create more value?

Change to this model early on is more believable. 10-year value is over the life of the asset.

The industry has changed a lot, and Microsoft has retreated from the idea of content exclusivity, instead focusing on a multi-platform approach. Obviously, this wasn't always part of the plan, and flip-flopping on big decisions like this creates a communication schism behind the scenes.

Moving back to Hines, the ex-marketing VP said that the worst part of his time at Bethesda was seeing the organization falling into the trap of being disingenuous.

Again, this wasn't elaborated upon, but it seems to nod to Microsoft's mixed messaging around exclusivity both behind the scenes and to gamers alike, as well as the company's penchant for changing its mind when it's favorable to do so.

"[The worst part of my job] was to join a place that I genuinely was a fan of and people there I genuinely held in high regard and esteem, and then to get there and see how it actually worked.

"To talk is something, right? But I'm very much about what is the follow up to that? Do you mean what you say? Or are you just saying shit that sounds good and then as soon as you leave this room that's completely forgotten?

"Because that is not how we ever operated at Bethesda.

"And that's not to say everything we said, we did. Yeah, we probably didn't fucking come close to that, but that was absolutely our intention. We are going to do what we say and say what we do and be genuine and be authentic.

"And truthfully, I still think Bethesda is just part of something that is not authentic and is not genuine. And that shouldn't be a surprise to you."

As for Bethesda, the company is shifting more towards transmedia and IP franchise longevity. The Fallout TV show has been a tremendous success for Bethesda, leading to thunderous game sales and engagement across the Fallout series.

Starfield is likely set to get a similar treatment as Bethesda positions the game for the long haul, facilitating a user-generated content economy through paid mods as well as new updates and multi-platform releases, like the recent launch on PS5.

This franchise is set to get a similar treatment as Bethesda's other series, and as I postulated, it's best to think of Starfield as an ecosystem rather than just a singular game. It feels like Starfield could likewise get re-releases on next-gen consoles like the PlayStation 6 and Project Helix console and maybe even a film or TV show adaptation, considering the game is an amalgamation of many recognizable sci-fi themes, including those from Star Trek, Battlestar Galactica, and Space 1999.