Microsoft to acquire Activision Blizzard for $68.7 billion

Microsoft agrees to a deal to acquire gaming giant Activision Blizzard for $68.7 million. The deal sets Microsoft as the third-largest gaming company by revenue, being behind Tencent and Sony only.

According to Accenture, Gaming industry’s total value now stands at $300 billion. A growth that has caught the eye of investors from any background. Well-known gaming company Activision Blizzard has agreed to be acquired by the tech giant, Microsoft, in a deal that surpasses $68 million, including the company’s net cash.

For the company that is under pressure from investors due to sexual harassment disputes and continuous executive mayhem, the deal is believed to be an escape rope. A couple of months back, Bobby Kotick, Activision Blizzard’s CEO has been expected to quit due to sexual harassment scandals and SEC investigations in his organization that account for over 10,000 staff members. The consideration to step down came after 2,000 current and past employees of his company signed a petition, calling for Kotick’s resignation. Kortick was aware of the misconduct in his company at the time but decided to turn a deaf ear to it, as reported by The Wall Street Journal.

But Microsoft says that Kortick will remain in the position as the head of Activision Blizzard, and will start reporting to Microsoft Gaming CEO and Head of Xbox, Phil Spencer.

“As a company, Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players,” Spencer wrote in a blog post recently, implicitly addressing the continuous turmoil at Activision Blizzard. “We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect. We hold all teams, and all leaders, to this commitment. We’re looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard.”

According to a recent press release from Microsoft, the tech giant is now the third-biggest gaming business worldwide by revenue, being behind Tencent and Sony only. Activision Blizzard is known as the home of numerous mega-franchises including “Candy Crush,” “World of Warcraft,” and “Call of Duty,” while Microsoft Gaming is a producer to Xbox consoles. Microsft is expected to add Activision Blizzard games to its cloud gaming subscription, Game Pass. While the latter just recently achieved 25 million subscribers, Activision boasts almost 400 million monthly active users (MAU).

“I’m on vacation today (lol) but if I were not I would be calling up some antitrust experts because Xbox buying Bethesda and now Activision sure seems like the type of horizontal merging that the DOJ frowns upon,” tweeted Jason Schreier on January 18, 2022.

This is not the only multi-billion dollar deal Microsoft was involved in. In late 2020, Microsoft closed a deal of acquiring ZeniMax Media Inc., parent company to Bethesda Game Studios, known for producing top games such as “Doom”, “Fallout”, “Edler Scrolls”, and many more. Thus, the acquisition of Activision Blizzard may raise concerns in front of Department of Justice about Microsoft forming a gaming monopoly. For instance, Meta, the new player in the metaverse ecosystem, is facing an antitrust suit because of its growing VR activity. Yet ironically, Microsoft’s most recent acquisition may represent a solid competition to Meta in the VR space.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” stated Satya Nadella, Microsoft’s chairman and CEO.

This deal, although already approved by members of both Microsft and Activision Blizzard, is set to complete in 2023. The purchase valued Activision Blizzard higher than the market rate, at a total of $95 per share.

Microsoft to acquire Activision Blizzard for $68.7 billion was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.