Microsoft is buying Activision Blizzard for $68.7 bn in all-cash deal


By MYBRANDBOOK


Microsoft is buying Activision Blizzard for $68.7 bn in all-cash deal

Microsoft Corp was on lookout for enhancing it’s gaming portfolio to have dominance presence across the globe. To complement it has confirmed it will buy Call of Duty videogame maker, Activision Blizzard, American video game company for $68.7 billion in cash, making the Xbox manufacturer the third-largest gaming company by revenue.

 

When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. The acquisition includes iconic franchises from the Activision, Blizzard and King studios like 'Warcraft', 'Call of Duty' and 'Candy Crush'.

 

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,” Microsoft Chief Executive Officer Satya Nadella said in a statement. 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.”

 

Microsoft’s offer is a premium of 45 per cent to Activision share price last week. Shares of Activision were up nearly 38 per cent at $65.39 before being halted for news.

 

Activision’s library of games – including the Call of Duty series and team-based shooter Overwatch, as well as platforming icons Spyro the Dragon and Crash Bandicoot – could give Xbox an edge over Sony’s Playstation, which has previously enjoyed a more steady stream of exclusive games.

 

The statement from Microsoft says, Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.

 

“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Phil Spencer, CEO, Microsoft Gaming. “Together we will build a future where people can play the games they want, virtually anywhere they want.”

 

“For more than 30 years our incredibly talented teams have created some of the most successful games,” said Bobby Kotick, CEO, Activision Blizzard. “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.”

 

Mobile is the largest segment in gaming, with nearly 95% of all players globally enjoying games on mobile. Through great teams and great technology, Microsoft and Activision Blizzard will empower players to enjoy the most-immersive franchises, like “Halo” and “Warcraft,” virtually anywhere they want. And with games like “Candy Crush,” Activision Blizzard´s mobile business represents a significant presence and opportunity for Microsoft in this fast-growing segment.

 

The 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. With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.

 

The transaction is subject to customary closing conditions and completion of regulatory review and Activision Blizzard’s shareholder approval. The deal is expected to close in fiscal year 2023 and will be accretive to non-GAAP earnings per share upon close. The transaction has been approved by the boards of directors of both Microsoft and Activision Blizzard.

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