Microsoft Buys Activision for $68,7 Billion
- Microsoft acquired Call of Duty, Overwatch, Warcraft, Diablo, and Candy Crush games.
- The biggest deal in Microsoft’s history is a bit tainted with Activision’s sex harassment controversy.
- The manufacturer of Xbox is trying to increase its mobile gaming footprint in the most profitable segment of the industry.
An Attempt to Conquer the Video Games Market
68,7 billion dollars – that’s how much Microsoft had to squeeze out in order to buy Activision Blizzard, a renowned video-game publisher from California, making it the biggest deal in the company’s 45-year long history. The shares were sold at $95 per share, an increase of almost 50% compared to where the stock closed on January 14th.
Microsoft has bought legendary gaming franchises like Diablo, Overwatch, Warcraft, Candy Crush and not to mention – Call of Duty, but the whole package can not be taken into consideration without some serious controversies that plagued Activision for some time.
By doing this, Microsoft only solidifies its intent to become the sole dominant name in the video game industry. As of now, Activision skyrocketed by 25% and it is trading around $80, although some fear that antitrust issues could start to arise and push the company below $95.
Last July, Wall Street Journal reported that Activision’s CEO Bobby Kotick was fully aware of the mistreatment of female staffers that lasted for years, possibly including rape and sexual misconduct. Kotick refused to report those problems to the board, and the scandal affected the price of Activision shares, which plummeted from around the $100 mark to just $56 in December 2021.
According to the statements issued by the two companies, when the deal closes the Activision Blizzard firm will have to report to Microsoft Gaming CEO Phil Spencer, and at this point, it is hard to tell what future awaits Kotick, who continued to serve as Activison’s boss after the ‘sex controversy’.
In terms of sales, Microsoft is now the third game company in the world, falling behind Chinese Tencent and Sony. Additionally, this purchase was a gateway for Microsoft to increase its mobile footprint, with mobile gaming being the largest gaming segment at the present.
According to the Microsoft statement, 95% of all players globally enjoy games on mobile, and games like Candy Crush combined with Activision Blizzard’s mobile business, represent a great opportunity for Microsoft, whose Game Pass portfolio recently reached 25 million subscribers.
With the latest acquisition, this number could increase dramatically. Activision has almost 400 million active players per month, in 190 countries, and the worth of their franchises is estimated to be around 3 billion dollars.
When completed in fiscal 2023, this deal will turn Microsoft into 30 gaming studios giant with boosted esports exposure, which is the quickest growing segment in the video game industry and the Call of Duty League, World of Warcraft Arena World Championship, Overwatch League, and Heartstone Grandmasters are just some of the Activision’s esports lucrative brands.