Microsoft to buy Activision Blizzard in $68.7bn deal
Image credit: reuters
Microsoft has agreed to buy gaming firm Activision Blizzard in a deal worth $68.7bn (£50.2bn), as the company aggressively expands its gaming ambitions.
Activision is responsible for publishing several of gaming’s largest franchises including 'Call of Duty', 'Warcraft', 'Destiny' and even the popular mobile game 'Candy Crush'.
As well as PC gaming and mobile, the acquisition will help Microsoft’s Xbox cement its foothold in the console market, particularly with its Game Pass service which has been dubbed the 'Netflix of gaming'.
The service currently has 25 million subscribers and Microsoft has major ambitions for further expansion. It said many of Activision Blizzard’s games will come to the service now that the takeover has been announced.
Microsoft is paying $95 a share in the deal - a 45 per cent premium on Activision Blizzard’s closing value at the end of the last week. The company has nearly 10,000 employees, with studios around the world. When the transaction is completed, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony.
The firm also purchased Zenimax in March 2021, which housed publisher Bethesda Softworks that is responsible for major titles such as the 'Elder Scrolls' series, 'Fallout', 'Doom' and 'Quake'.
“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 Microsoft CEO Satya Nadella.
“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.”
Bobby Kotick, Activision Blizzard CEO, said: “For more than 30 years our incredibly talented teams have created some of the most successful games.
“The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”
The transaction is still not finalised: it is subject to customary closing conditions and completion of regulatory review and Activision Blizzard’s shareholder approval. The deal is not expected to close until the fiscal year 2023, which begins in October.
In 2021, Activision Blizzard found itself facing a lawsuit from the California Department of Fair Employment and Housing (DFEH) for alleged sexual harassment against some of its female workers. The suit made accusations that it fostered a “frat boy” culture that included sexual harassment against women working for the firm.
The company's management initially tried to pass off the allegations as false, which led to employees sharply criticising the management's lack of seriousness over the matter. Employees later staged a walk-off over the issue. Activision Blizzard eventually created an $18m relief fund for affected employees.
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