It’s an all-cash deal.
Microsoft Buying Activision Blizzard
On Tuesday, Microsoft announced that it’s going to buy game developer Activision Blizzard for $68.7 billion. This is an all-cash transaction. The game developer’s stock increased by over 25%, after the announcement. It closed at $82.31 per share on Tuesday.
Microsoft’s shares, on the other hand, closed down over 2%.
So far, this is Microsoft’s largest acquisition, followed by LinkedIn’s purchase in 2016 for $26.2 billion.
Reports of Sexual Misconduct
The game developer has been in a lot of controversies lately after several reports revealed sexual misconduct and harassment among its executives. The company said that it canned its executives after an investigation.
During the transition, though, the company’s current CEO Bobby Kotick will remain in his position. But Bobby is also facing calls to resign because of cultural problems in the company.
After the deal concludes, Activision will report to Phil Spencer, Xbox’s boss. It may also mean that after the transition, Kotick may leave his role as CEO.
Currently, Tencent and Sony are the largest gaming companies by revenue. But once this transaction closes, Microsoft will become the third-largest gaming company.
The acquisition means that Microsoft will own iconic franchises, like Warcraft, Overwatch, Candy Crush, and Call of Duty. The company will also own global eSports activities. Activision has studios around the world with 10,000 employees.
According to Microsoft’s Satya Nadella:
“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. We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”
Activision Blizzard believes that it has built talented teams for more than 30 years. They allowed the company to create some of the most successful games played by many people around the world.
In an increasingly competitive industry, the world-class talents of the two companies can ensure their continued success.
The deal can also bolster Microsoft’s Game Pass portfolio. It’s planning to introduce Activision Blizzard games into Game Pass.
Because they are two large companies, the deal may attract the attention of regulators. However, experts said that Microsoft will still gain clearance as it’s not under the same pressure as Facebook, Apple, and Google. Then again, before it can gain clearance, Microsoft may still experience speed bumps because of the deal’s size.
Microsoft has seen huge success with its business-to-business offerings. This deal can boost its consumer strategy.
Gaming is big today considering the ongoing pandemic. Lockdowns in some countries are still being implemented. Many are playing online games to relieve their boredom.
“With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.”
