Microsoft stated that the Activision-Blizzard acquisition will help it extend its gaming business across mobile, PC, and console platforms, as well as provide the foundation for the metaverse. The acquisition of the Call of Duty creator comes as Microsoft aggressively expands its Game Pass subscription program.
“We’re investing heavily in world-class content, community, and the cloud to usher in a new era of gaming that prioritizes players and creators while making gaming safe, inclusive, and accessible to everyone,” Microsoft CEO Satya Nadella said in a statement.
Microsoft intends to pay $68.7 billion for Activision Blizzard. In the struggle for gamer popularity, Sony’s PlayStation 5 is largely seen as having the upper hand against Microsoft’s fourth-generation Xbox devices.
Sony has developed its network of in-house gaming studios in recent years and delivered a run of exclusive blockbusters, including the Spider-Man franchise, leaving its US competitor playing catch-up.
Microsoft’s Activision Acquisition Key Takeaways
- Microsoft Corp. announced today its intention to buy Activision Blizzard Inc., a pioneer in game creation and interactive entertainment content publishing.
- This purchase will drive Microsoft’s game business development across mobile, PC, console, and cloud platforms, as well as supply building pieces for the metaverse.
- When the deal is completed, Microsoft will be the world’s third-largest gaming firm by revenue, behind only Tencent and Sony.
- The projected purchase includes legendary properties like as “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty,” and “Candy Crush” from Activision, Blizzard, and King, as well as worldwide eSports operations via Major League Gaming.
- The firm has almost 10,000 workers and studios all around the world.
How Did Microsoft Acquired Activision Blizzard
Microsoft’s $68.7 billion acquisition of Activision Blizzard is a massive push to reshape the tech titan’s present and future. If finalized, it would be Microsoft’s largest-ever transaction and the world’s largest all-cash acquisition. We can say that, for such a significant transaction, it came together pretty swiftly.
Microsoft capitalized on Activision’s problems. Activision was besieged by charges last summer that senior executives disregarded sexual harassment and discrimination in the workplace, a crisis that finally swallowed the company’s CEO, Bobby Kotick. The corporation was under fire from all sides, including Microsoft, which said that its game division was reconsidering its relationship with Activision. However, the tech behemoth maintained regular communication with Kotick.
With Activision’s shares down dramatically in December, Microsoft approached Kotick with a buyout proposition. Kotick turned down the offer, but in order to shepherd his struggling firm to a safe haven, he encouraged the software behemoth to come back with a stronger one. Microsoft did, launching a weeks-long push to reach a deal.
Microsoft investigated the workplace allegations as part of its due diligence and found that they were mostly in the past and that the problem was controllable. Nonetheless, Kotick is anticipated to step down as Activision’s CEO once the acquisition is completed.
It’s a significant wager on gaming and the internet. Adding Activision and its almost 400 million monthly users would immediately strengthen Microsoft’s position in the lucrative video game industry, where it competes with Sony and emerging forces like Amazon and Apple. Some gamers who have been dissatisfied with Activision in recent years believe the transaction would reverse a decrease in the quality of the takeover target’s games.
Activision, on the other hand, is intended to help Microsoft compete in the so-called metaverse, a merger of internet and virtual reality on which firms have placed their fortunes. (After all, Facebook’s parent corporation called itself Meta.) The metaverse is largely a buzzword for now, but Microsoft expects that Activision’s technological know-how and popularity will give it an advantage.
It’s also a gamble on avoiding antitrust investigations in Washington. Until recently, Microsoft has mostly avoided the latest drive to crack down on digital behemoths like Amazon, Alphabet, and Meta. Even after acquiring Activision, the business claims that it would still be significantly smaller in the video game market than Sony or Tencent. In addition, as a statement of its confidence in the merger, Microsoft would pay Activision up to $3 billion in breakup costs if the transaction is blocked by authorities. Microsoft anticipates that the transaction will take up to 18 months to complete.