Eyeing global gaming market pie, technology Microsoft in a multi-billion deal is set to pick video game maker Activision Blizzard for $68.7 billion in one of the biggest gaming industry deals.
According to Microsoft, this is its biggest-ever all-cash acquisition on record, which will bolster its firepower in the booming video gaming market where it takes on Tencent and Sony.
The deal also represents the American multinational’s bet on the ‘metaverse’, virtual online worlds where people can work, play and socialize, as many of its biggest competitors are already doing.
This will further bring more intellectual property (IP) under the Xbox and Game Pass umbrella. Activision Blizzard is the maker of popular games like Call of Duty (CoD) and Warcraft.
When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. What this means is that Microsoft is one of the top global players in the virtual gaming industry.
Following the 2014 acquisitions of Mojang (makers of Minecraft) and 2021 acquisition of ZeniMax Media/Bethesda (makers of Doom, Elder Scrolls, and Fallout), Activision Blizzard brings IP like Call of Duty, World of Warcraft, and Candy Crush to Microsoft’s portfolio.
Mobile gaming sector has swelled many folds in recent times with nearly 95 per cent of all players globally enjoying games on mobile. The latest acquisition also bolsters Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million subscribers.
As per regulatory filing Microsoft, one of the biggest tech companies in the world that owns platforms including Azure cloud computing platform and Outlook franchise is offering $95 per share – a 45% premium to Activision’s Friday close.
Activision’s shares were last up 26% at $82.10, still a steep discount to the offer price, reflecting concerns the deal could get stuck in regulators’ crosshairs.
Microsoft has so far avoided the type of scrutiny faced by Google and Facebook but this deal, which would make it the world’s third-largest gaming company, will put the Xbox maker on lawmakers’ radars, said Andre Barlow of the law firm Doyle, Barlow & Mazard PLLC.
