Friday, May 27, 2022

Microsoft to acquire Activision Blizzard for $68.7 billion

This is the largest deal made by Bill Gates’s company in its 46-year history

Microsoft has announced that it will acquire the famous video game company Activision Blizzard, which has in its assets Call of Duty and Candy Crush, for a price of 68.7 billion dollars.

This is the largest acquisition made by Bill Gates’s American giant in its 46-year history. Through this deal, Microsoft is entering the metaverse market aiming to play a leading role in the field of video games, the largest and fastest-growing form of entertainment.

As stated by the company, Microsoft will acquire Activision Blizzard for $95.00 per share, and when the transaction closes, Bill Gates’s firm will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. In addition, the acquisition of Activision Blizzard is a challenge for U.S. regulators, as both Democrats and Republicans have pushed to limit the power of high-tech giants.

“The transaction is subject to customary closing conditions and completion of regulatory review and Activision Blizzard’s shareholder approval. The deal is expected to close in the fiscal year 2023 and will be accretive to non-GAAP earnings per share upon close. The transaction has been approved by the boards of directors of both Microsoft and Activision Blizzard” said Microsoft in a written announcement for the deal.

With this agreement, Microsoft will gain almost 400 million monthly Activision game users and access to some of the most popular games in the world.

“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,” said Satya Nadella, chairman and CEO, Microsoft. “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.”

Following the announcement of the acquisition, the share price of Activision Blizzard increased by almost 40%, while that of Microsoft had a decrease of 1%.

The planned acquisition includes iconic franchises from Activision, Blizzard, and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming.

Activision Blizzard has studios around the world with nearly 10,000 employees.

“For more than 30 years our incredibly talented teams have created some of the most successful games,” said Bobby Kotick, CEO, Activision Blizzard. “The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision, and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”

Although the company’s plans have not been fully disclosed, it seems that Microsoft, which also has the Xbox console and “Minecraft”, will follow a hybrid model as far as the availability of Activision Blizzard games to other – competing – companies, such as Sony which owns the PlayStation. In addition, so far it is not clear whether new versions of video games such as “Call of Duty” will continue to be distributed on consoles such as the PlayStation or will be released exclusively on the Xbox.

“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Phil Spencer, CEO, Microsoft Gaming. “Together we will build a future where people can play the games they want, virtually anywhere they want.”

George Mavridis
George Mavridis
George Mavridis is a freelance journalist and writer based in Greece. He graduated from the Aristotle University of Thessaloniki with a BA in Journalism and Mass Communication. Also, he holds an MA in Media and Communication Studies from the Malmö University of Sweden and an MA in Digital Humanities from the Linnaeus University of Sweden. His work primarily covers tech, innovation, social media, digital communication, and politics.

Related Articles

Latest Articles