Microsoft announced a deal to buy video-game player Activision Blizzard for $68.7 billion in cash. If it goes through, it would be Microsoft’s biggest-ever acquisition — and by far the biggest deal ever in the video game biz.
Activision Blizzard’s lineup of games includes “Call of Duty,” “Candy Crush,” “Warcraft,” “Diablo,” “Overwatch” and “Hearthstone.” According to Microsoft, the deal will accelerate the growth its gaming business across mobile, PC, console, and cloud and will provide building blocks for the metaverse.
With Activision Blizzard, Microsoft would become the world’s third-largest gaming company by revenue, behind China’s Tencent and Sony. The deal is expected to close in Microsoft’s fiscal year 2023 (which ends June 2023), subject to regulatory review and approval by Activision Blizzard shareholders.
Activision Blizzard, in addition to its core games development and publishing business, runs a global esports network through its Major League Gaming division. The company has nearly 10,000 employees worldwide.
The deal news, announced Tuesday, comes as Activision Blizzard has been attempting to recover from a scandal in which the company was accused of allowing a “pervasive frat boy workplace culture” to thrive that allegedly resulted in women employees being continuously subjected to sexual harassment and being paid less than men, per a lawsuit by the state of California. Activision Blizzard has fired or “pushed out” more than three dozen employees for misconduct since last July, the Wall Street Journal reported.
“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 chairman and CEO Satya Nadella said in announcing the Activision Blizzard pact. “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 said that Activision Blizzard CEO Bobby Kotick will continue in that role. Once the deal closes, Kotick will report to Phil Spencer, CEO of Microsoft Gaming.
“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” Spencer said in a statement. “Together we will build a future where people can play the games they want, virtually anywhere they want.”
Microsoft in March 2021 closed the $7.5 billion acquisition of ZeniMax Media, parent company of Bethesda Softworks, one of the biggest privately held game companies in the industry with titles including “Fallout,” “The Elder Scrolls,” “Doom,” “Quake,” “Wolfenstein,” “Prey” and “Dishonored.” In 2014, Microsoft bought “Minecraft” maker Mojang in a $2.5 billion deal.