Microsoft has announced that the company is acquiring Activision Blizzard in an all-cash deal that is worth $68.7 billion. This is by far the highest bid from Microsoft for the acquisition of any company. For instance, it acquired LinkedIn for $26 billion in 2016.
The company says that once the deal goes through, it will be the third-largest gaming company by revenue, just behind the giants Tencent and Sony. Microsoft is paying $95 per share, which is about 45 percent above his company’s stock price.
Microsoft expects this acquisition deal to close in fiscal year 2023” which means that there’s still a long wait of several months. The longer wait could be because of the number of markets for operations, making regulatory approval more complicated.
This acquisition is yet another example of the rapid consolidation happening in the game industry and the reason behind seems to be the race for having a catalogue of exclusive content. Companies, including Microsoft, sometimes makes the games it owns available only on its own gaming consoles and not available for competitive products.
Once the deal closes, Microsoft will be adding Activision’s games to Xbox Game Pass which includes titles like Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush. Phile Spencer, CEO of Microsoft Gaming, said, “Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog.”
The acquisition of Activision Blizzard comes at a time when the company faces accusations senior executives having ignored sexual harassment and discrimination. Its shares fell 27 percent since California sued the company in July over the claims.
Bobby Kotick, CEO of Activision Blizzard will stay in his role and will be reporting to Phil Spencer who is leading Microsoft Gaming. Reports indicate that soon after the transition period, Mr. Kotick could step down or continue in an advisory role.
Microsoft is focusing a lot on the gaming for the past few years and seems like the pandemic has helped the company as more people stay home and using gaming systems. In January 2021, on the heels of massive demand for its Xbox gaming consoles, Microsoft’s gaming revenue surpassed $5 billion for the first time.
RELATED:
- Microsoft Teams now features the Walkie Talkie functionality across all platforms
- Microsoft Surface Pro 8 and Surface Go 3 LTE models now available for purchase
- Sony PlayStation 5 may soon be able to run older PlayStation 3 games
- BGMI partners with Sony for exclusive “Spider-Man: No Way Home” in-game content
- Microsoft and iFixit partner up to make repair tools for Surface devices
