Microsoft Buys Activision Blizzard for $68 Billion
Microsoft, the creators of the Xbox, will acquire the video game publisher giant, Activision Blizzard, in a $68.7 billion deal. This comes after Microsoft’s purchase of ZeniMax Media in 2020, which included popular publisher Bethesda Softworks. This latest purchase is hugely significant, and reshapes the gaming world, building a gaming empire for Microsoft/Xbox. The deal is also the largest in the tech giant’s history.
The deal will merge Xbox Game Studios (Bethesda Softworks, 343 Industries) and Activision Blizzard, who are the makers of major franchises like Call of Duty, World Of Warcraft and Tony Hawk. Microsoft will become the world’s third-largest gaming company, behind Tencent and Sony, if the deal goes through.
One of the main benefits of the deal is that Activision titles will be available to play on Xbox’s popular subscription service – Game Pass. The acquisition will expand the already vast catalogue of games on the paid subscription service. Activision’s Call of Duty franchise, with a new release every year, will be a strong driver of subscription sales as a major addition to the service.
Activision Blizzard has recently been subject to #MeToo investigations from the state of California, due to allegations of sexual harassment and discrimination. Male employees have allegedly joked about rape and a female employee committed suicide after colleagues shared a nude photo of her. The shocking allegations also claim that one executive’s office was known as the “Cosby Suite” due to his reputation for sexual misconduct.
The claims led to CEO Bobby Kotick issuing an apology to employees in October. Microsoft says that Kotick will continue to serve as Activision CEO following the deal, however, he and the Activision team will report to Phil Spencer, CEO of Microsoft Gaming. Nadella also said that Microsoft will support Activision Blizzard as it goes through a cultural change.
Mobile gaming is a significant part of the mega-deal, with Activision owning popular mobile games like Candy Crush. Given Microsoft isn’t currently a leader in mobile gaming – this deal will change that. The deal is also set to be part of a push into the “metaverse.” Nadella said that removing barriers on distribution “will only become more important as the digital and physical worlds come together and the metaverse develops.” Activision’s Kotick then mentioned that “our talent and our franchises are critical components in the construction of a rich metaverse” (Source: THR).
The Microsoft–Activision Blizzard Deal is expected to close in 2023.