Microsoft buys Activision Blizzard for $68.7 billion

Deepak Gupta January 18, 2022
Updated 2022/01/18 at 2:13 PM

Microsoft has just made one of the biggest deals ever for a game studio. The company has announced plans to acquire Activision Blizzard for $95 a share, valuing the cash deal at a massive $68.7 billion. The deal would make the combined entity the “third-largest” gaming company by revenue, according to Microsoft, and place titles like call to action, world of warcraft and candy Crush under the company’s wings. Microsoft plans to add Activision Blizzard games to Game Pass as part of the deal.

Mobile gaming is also a significant factor in the acquisition, Microsoft said. In addition to doubling King’s mobile games into Microsoft’s business, the purchase promises to bring franchises like areola and warcraft for more devices.

The purchase is expected to complete sometime in Microsoft’s fiscal 2023 (June 2023 at the latest) if regulators and Activision Blizzard shareholders approve the change. The boards of directors of both companies have already approved the deal.

While news of the acquisition comes when Activision Blizzard is still embroiled in a misconduct scandal, you shouldn’t expect significant leadership changes. Bobby Kotick will remain the CEO of Activision Blizzard despite calls for resignation, and will now report to Microsoft Gaming boss Phil Spencer. On a company letter, Kotick described Microsoft’s move as a chance to “further strengthen” Activision Blizzard’s work culture and “set a new standard” for inclusivity. He did not outline specific plans for the reform, but said there would be “minimal changes” to the employee count after the union is completed.

If it goes ahead, the merger will help Microsoft compete with heavyweights Tencent and Sony, who have been binge-buying in recent months. Kotick has also seen this helping his company better compete as metaverse games gain prominence. In that light, this can be as much a matter of preparing the company for the future as anything else.

Some important questions remain, however. Microsoft didn’t say how many Activision Blizzard games would be Xbox exclusives on consoles or Windows exclusives on computers. It’s also unclear how much Microsoft can influence the development of major franchises. It is not certain that Microsoft will block call to action or other gaming giants for the Xbox in the near future, however – PlayStation sales represent a large part of Activision Blizzard’s revenue, and abandoning that platform would significantly reduce the company’s influence in the gaming industry.

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