Obviously this too must be taken with a grain of salt, since it is only a rumor, but on the other hand in this period it is quite difficult to go beyond these as regards the news of large caliber, so let's try to think about the possible scenarios.
Therefore, the most likely idea coming from this question is that a partnership agreement between Microsoft and Paradox is possible for the publication of the latter's games on Xbox Game Pass, an extended initiative that could come to include, at least for a certain period, also the news of the publisher to be launched directly on the service.
On the other hand, the great Crusader Kings 3 was released on Xbox Game Pass on day one, so it would just be an extension of this initiative that is already underway between the two companies, which seems to be quite likely.
However, not the most daring interpretations are lacking: according to some, even Paradox could be among the famous candidates for acquisition by Microsoft, which apparently is always lurking in these cases. Paradox is in fact partially in the public domain, which could make the matter complicated, but not what happens with companies mostly held by shareholders on the public front.
As for the majority, in fact, Paradox is controlled by private shareholders, therefore an acquisition would be possible by obtaining these shares without going through a takeover bid, which paved the way for the usual conjectures.
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