Microsoft Buying Activision Blizzard For $68.7B Is A Huge Win For Xbox And PC Game Pass Gamers
Microsoft is on the cusp of owning a whole bunch of additional iconic franchises and characters, including Call of Duty, World of Warcraft, Crash Bandicoot, Spyro, and every other gaming IP that falls under the purview of Activision Blizzard. That's because Microsoft announced it is acquiring Activision Blizzard for a massive sum—$95 per share in an all-cash transaction valued at $68.7 billion.
The deal dwarfs the $2.5 billion Microsoft spent acquiring Minecraft developer Mojang in 2014, and is more than two and a half times what it paid for LinkedIn in 2016, to offer some perspective. Gaming is big business and while this represents a huge investment, there are numerous upsides for making such a deal. One of them is the immediate bolstering of its Xbox Game Pass and PC Game Pass subscription services.
"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. We also announced today that Game Pass now has more than 25 million subscribers. As always, we look forward to continuing to add more value and more great games to Game Pass," Microsoft Gaming CEO Phil Spencer stated in a blog post.
Activision Blizzard boasts nearly 400 million monthly active players across 190 countries. It also owns no less than three billion-dollar franchises. After the deal close, those will all transfer to Microsoft, which will then have 30 internal game development studios, plus various publishing and esports production capabilities.
Of course, a deal this size couldn't pass by without a shout out to the metaverse.
"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."
It remains to be seen exactly how this will play into Microsoft's plans for the metaverse. What we can say, however, is this is yet another major gaming acquisition. Just last year, Microsoft purchased Bethesda and its parent firm ZeniMax Media for $7.5 billion. In that sense, Mr. Nadella has been on a spending spree with regards to gaming acquisitions and related plays (remember Beam?).
Microsoft's announcement comes at a time when Activision Blizzard finds itself embroiled in a controversy over allegations of sexual misconduct. There have been dozens of firings in the wake of the allegations, though despite calls for Activision CEO Bobby Kotick to resign, he has not done so and will remain in charge of the division for now. Once the deal closes, however, Activision Blizzard will report directly to Spencer. It's not clear if that means Kotick will be out when that happens.
The deal will also give Microsoft a bigger presence on mobile, with games like Call of Duty: Mobile and Candy Crush Saga. According to Microsoft, mobile is the biggest segment in gaming, with almost 95 percent of gamers around the world playing on mobile devices.
The deal is subject to closing conditions and regulatory review. Microsoft expects it to be complete in fiscal year 2023.