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Microsoft to buy Activision in $68.7 billion all-cash deal

The American multinational technology corporation, Microsoft will be buying video game giant Activision Blizzard in a $68.7 billion all-cash deal.

The American multinational technology corporation, Microsoft will be buying video game giant Activision Blizzard in a $68.7 billion all-cash deal.

Shares of Activision surged about 31% on Tuesday morning following the announcement of the news. Reportedly, Microsoft shares witnessed a downfall of nearly 2%. This is considered to be Microsoft’s largest acquisition to date after its purchase of LinkedIn in 2016 for $26.2 billion.

Activision is known for popular games such as Call of Duty and Tony Hawk’s Pro Skater was linked to controversies for months following reports on sexual misconduct and harassment among the executives of the company. As per the video game giant, several executives were fired after a probe.

Microsoft

The CEO of Activision Bobby Kotick will remain in charge during the transition. According to Microsoft, Activision as a company will report to Microsoft’s Xbox boss Phil Spenser on the closure of the deal. The tech company asserted that it expects to close the deal in its fiscal year 2023.

In 2014, the company bought Minecraft maker Mojang for $2.5 billion while last year it completed a $7.5 billion acquision of game maker Bethesda.

The deal holds a long-term vision for Microsoft with it competing with Meta (formerly Facebook) to create a virtual world with the help of technology, naming it as Metaverse. Notably, Microsoft CEO Satya Nadella was the first big CEO techie to publicly accept the value of the metaverse, even before Mark Zukerberg.

Activision

Besides, in an interview with CNBC, Kotick stated that after realising Microsoft has the technology to take Activision forward in the emerging competition between tech companies to build the metaverse, he came up with the idea of the deal. Spencer in the same interview said the acquisition between the same companies started later in 2021.

They both asserted that both the companies focussed on the present highlighting Activision’s strength in mobile gaming. Also, they focussed on the opportunity to cross-promote popular gaming franchises from both companies such as Microsoft’s Halo and Activision’s World of Warcraft.