Microsoft to Acquire Activision Blizzard for $68.7 Billion
Microsoft has reached an agreement with gaming giant Activision Blizzard for an acquisition. Microsoft will pay $68.7 billion for the acquisition, if approved by authorities. After the takeover, ‘as many games as possible’ will come to Game Pass.
With the acquisition, Microsoft gains many major gaming franchises, including Call of Duty, Warcraft, Diablo, Overwatch, Tony Hawk, Hearthstone, Crash Bandicoot, StarCraft and Spyro. King’s mobile games, such as Candy Crush, are also part of the acquisition.
Announcing the acquisition, Xbox CEO Phil Spencer says that after closing, as many Activision Blizzard games as possible will be offered through Game Pass subscriptions for Xbox and PCs. This will concern new titles and existing titles from the publisher. Spencer also announced that Game Pass currently has 25 million subscribers.
Microsoft wants to pay $95 per share. This brings the price to a total of 68.7 billion dollars. That makes it by far the largest acquisition to date in the games industry. The planned acquisition of Zynga by Take-Two, for $12.7 billion, is the next largest acquisition.
Microsoft says it will be the world’s third largest game company after the acquisition, after Tencent and Sony. Microsoft and Activision Blizzard agree on terms for the acquisition, but regulatory authorities have yet to approve. Both companies expect the acquisition to be completed in financial year 2023. That fiscal year runs from July 2022 to July 2023.
Until the acquisition is completed, Activision Blizzard will continue to exist in its current form, led by existing CEO Bobby Kotick. When the deal is completed, Xbox CEO Phil Spencer will also head Activision Blizzard. Current director Bobby Kotick appears to be disappearing from the scene after the takeover. His name is not mentioned in Microsoft’s future plans. Employees and shareholders have already asked for his resignation because he allegedly knew and participated in a culture of discrimination and harassment within Activision Blizzard, for which the company has been sued. According to a New York Times reporter won’t say Kotick whether he will still be CEO after completion of the takeover. “After finishing, I’ll be available if needed,” he says.
Microsoft emphasizes that it wants to be inclusive for both employees and players. Microsoft also says it values individual cultures at studios and that creative success and autonomy go hand in hand with treating each person with dignity and respect. “We hold all teams and all leaders to this commitment,” said Spencer.
It is Microsoft’s second multi-billion dollar acquisition in two years. In September 2020, Microsoft announced its intention to acquire Bethesda’s parent company for $7.5 billion. The takeover was approved and completed six months later.
Microsoft and Activision Blizzard