Microsoft Acquires Activision Blizzard for Nearly $70 Billion
Today, Microsoft Corp. announced plans to acquire Activision Blizzard Inc., a leader in game development and interactive entertainment content publisher. This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud.
At an acquisition rate of $95.00 per share, the transaction is valued at $68.7 billion, inclusive of Activision Blizzard’s net cash. If the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. For context, the transaction alone exceeds the entirety of Nintendo’s market capitalization, which is currently at $61 billion.
With this transaction, this means that Microsoft will also acquire Activision, Blizzard and King Studio franchises like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush”, in addition to global eSports activities through Major League Gaming. The company has studios globally with nearly 10,000 employees.
What does this mean for gamers? For starters, for those who have subscribed to Xbox GamePass or are interested in doing so, the subscription’s value has exponentially increased, as the acquisition of these franchises under the Microsoft title means that their games will also be available to the service.
Of course, there are concerns regarding the monopolization of the gaming industry, with Microsoft owning numerous studios that were previously parented by Activision Blizzard, this acquisition could have some positive effects on Blizzard both culturally and strategically. Under Activision, every game produced had to be a billion-dollar franchise. Under Xbox, that likely will change.
The CEO of Activision Blizzard, Bobby Kotick, whom, along with the company was roiled by multiple allegations regarding workplace misconduct. Due to the nature of the transaction, he will still be the CEO of the company during its remaining independence, which will last for about another year or so. After the period, once Microsoft officially becomes the parent company, Phil Spencer will be leading the adopted company.
Besides the changes to the gaming culture as a whole, it’s hoped that Microsoft acquiring Activision Blizzard will be able to create a much more healthy developer culture in the company, something that the company has been devoid of after the sexual harassment and discrimination allegations had come to light. Under Xbox, Blizzard may be able to regain some of its autonomy and fix some of its biggest problems.