Microsoft To Buy Gaming Company Activision Blizzard for $68.7 Billion
Microsoft is looking to bolster its gaming and metaverse efforts with the purchase of California-based Activision Blizzard Inc.
The pending deal, announced Tuesday, includes buying the video game company for $95 per share, for an estimated total of $68.7 billion. If finalized, this will mark the largest video game acquisition in history and the largest acquisition ever for Microsoft, dwarfing the $26 billion it spent years ago on LinkedIn.
Activision Blizzard is one of the world's largest digital media companies, with financial and commercial hits including World of Warcraft, Call of Duty, Overwatch and Diablo. The deal will also include mobile game maker King, which is best-known for its Candy Crush line of games.
"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 of Microsoft, during a Tuesday call announcing the pending deal. "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."
During the call, Nadella stressed that this acquisition goes further than just video games, saying moves like this will help Microsoft in supporting and developing multiple metaverse platforms to create community and connectivity among gamers and non-gamers.
On the video game front, the deal will strengthen Microsoft's subscription-based Gamepass for its Xbox family of consoles and PCs by including Activision Blizzard's game offerings. It will also hope to generate higher hardware sales of gaming PCs and Xbox consoles, with previous Activision Blizzard multiplatform titles becoming exclusive to the Xbox ecosystem.
The proposed deal comes on the heels of legal trouble for Activision Blizzard, which was served a suit by the California Department of Fair Employment and Housing in June 2021 for allegations of employee sexual harassment, discrimination and retaliation by those in leadership roles. Activision Blizzard employees staged a walkout in November 2021 to protest CEO Bobby Kotick and other executives' lack of accountability and lack of a commitment to change corporate culture.
While Microsoft hasn't announced whether Kotick will be a part of the company once the acquisition is finalized, it did say that longtime Microsoft employee Phil Spencer, head of Xbox, will be taking the lead.
Further, speaking on the Activision Blizzard current corporate culture, Nadella said his top priority is to work with current employees to create a more inclusive and safe work environment. "As CEO of Microsoft, the culture of our organization is my number one priority," said Nadella. "This means, we must continuously improve the lived experience of our employees and create an environment that allows us to constantly drive every day improvement in our culture."
Microsoft expects the deal to close in fiscal year 2023.