Monday, September 26, 2022

Microsoft Adding ‘Building Blocks’ for Metaverse in Acquiring Activision Blizzard for $68.7B

REDMOND, Wash. and SANTA MONICA, Calif. — Microsoft is planning to acquire the gaming company Activision Blizzard in an all-cash transaction valued at $68.7 billion.

Microsoft expects the planned acquisition will provide “building blocks” for the metaverse and accelerate growth in its gaming business across mobile, PC, console and cloud, according to Microsoft this month. 

Microsoft will acquire Activision Blizzard for $95.00 per share, inclusive of Activision Blizzard’s net cash. When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. 

The planned acquisition includes iconic franchises from the Activision, Blizzard, and King studios, like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” as well as global esports activities through Major League Gaming. Activision Blizzard has studios around the world with nearly 10,000 employees.

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Microsoft will have 30 internal game development studios, along with publishing and esports production capabilities.

With three billion people playing games today, gaming is the largest and fastest-growing form of entertainment, according to Microsoft.

Mobile is the largest segment in gaming, with nearly 95% of all players globally playing games on mobile. With games like “Candy Crush,” Activision Blizzard’s mobile business represents a “significant presence and opportunity” for Microsoft in the segment.

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.

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. The transaction has been approved by the boards of directors of both Microsoft and Activision Blizzard.

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“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.”

Bobby Kotick, CEO, Activision Blizzard, said the combination of Activision Blizzard’s talent and 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.”

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