Recently, Microsoft announced its plans to acquire Activision Blizzard Inc, a leader in game development and interactive entertainment content publisher, in order to accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud.
According to the announcement, Microsoft will buy Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion. This acquisition will make Microsoft the world’s third-largest gaming company by revenue, after Tencent and Sony. The acquisition includes franchises from the Activision, Blizzard and King studios like Call of Duty, Warcraft, Diablo, Overwatch, and Candy Crush apart from the global eSports activities via Major League Gaming.
Source: Microsoft
The transaction has already been approved by the boards of directors of both companies and is expected to close in fiscal year 2023. It will be accretive to non-GAAP earnings per share upon close.
Bobby Kotick, the CEO of Activision Blizzard will continue with his designation and will report to Phil Spencer, CEO of Microsoft Gaming; after the acquisition.
"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,...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." said Satya Nadella, chairman and CEO, Microsoft.
The integration of Blizzard will also reinforce Microsoft’s Game Pass portfolio with Activision Blizzard games into it, which already has reached over 25 million subscribers. Activision Blizzard has approx 400 million monthly active gamers in 190 countries and three billion-dollar franchises. The integration will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry.
It's worth noting that this acquisition is the biggest gaming industry deal so far, as well as the largest all-cash purchase on record.
Well, Tech giants from Microsoft to Nvidia are placing big bets on the metaverse, and Microsoft acquiring Activision really begins the metaverse arms race.