Microsoft is acquiring rival Activision Blizzard in a $68.7 billion deal that will reshape the video game sector.
The all-cash transaction vaults Microsoft to the No. 3 spot among all global video game companies by revenue, behind Tencent and Sony. At $95 per share, the deal represents a 45% premium on last Friday’s closing price of Activision Blizzard shares.
Activision Blizzard’s various divisions make games like Warcraft, Diablo, Overwatch, Call of Duty and Candy Crush, in addition to eSports ventures via Major League Gaming. The company has studios around the word with nearly 10,000 employees.
Gaming has surged during the coronavirus pandemic, and the deal is just the latest combination of significant players. Last week, Grand Theft Auto publisher Take-Two Interactive said it would acquire Zynga, which makes mobile games, in a deal worth $12.7 billion.
Activision Blizzard has been contending with a massive internal disruption as a company, with numerous reports of sexual harassment involving senior executives.
Bobby Kotick will continue to serve as CEO of Activision Blizzard. The deal announcement said and he and his team will “maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth.” After the deal closes, Activision Blizzard will report to Phil Spencer, CEO, Microsoft Gaming.
“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, Microsoft. “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.”
Kotick noted Activision Blizzard’s 30-year run as a company. “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,” he said.
