{"id":3960,"date":"2022-01-18T18:57:08","date_gmt":"2022-01-18T18:57:08","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/18\/microsoft-buys-activision-blizzard-for-68-7-billion\/"},"modified":"2022-01-18T18:57:08","modified_gmt":"2022-01-18T18:57:08","slug":"microsoft-buys-activision-blizzard-for-68-7-billion","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/18\/microsoft-buys-activision-blizzard-for-68-7-billion\/","title":{"rendered":"Microsoft buys Activision Blizzard for $68.7 billion"},"content":{"rendered":"

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Microsoft agreed to buy Activision Blizzard for $68.7 billion on Tuesday, using its vast cash reserves to acquire the company behind blockbuster game franchises such as \u201cCall of Duty,\u201d \u201dCandy Crush\u201d and \u201cWorld of Warcraft,\u201d while the Santa Monica firm is being sued by California regulators over allegations of workplace harassment and gender discrimination.<\/p>\n

The all-cash deal will be the largest acquisition in Microsoft history, if approved by antitrust watchdogs, and would make the Seattle software giant the third-largest gaming company by revenue, behind Japan\u2019s Sony Group and China\u2019s Tencent Holdings. <\/p>\n

Activision Blizzard\u2019s share price had dropped nearly 30% over the past six months, after California\u2019s Department of Fair Employment and Housing filed suit against the firm alleging that senior leaders allowed sexual harassment and pay discrimination to continue unchecked throughout the company for years. A Wall Street Journal investigation<\/a> in November that showed that Activision chief executive Bobby Kotick knew about sexual harassment allegations for years sparked a protest movement among employees, with nearly a fifth of the firm\u2019s 10,000 staffers signing a petition calling for Kotick\u2019s resignation.<\/p>\n

Microsoft agreed to pay $95 per share in the merger, nearly 45% above the stock price before the deal was announced, valuing Activision at a premium over its pre-lawsuit price. Kotick, who has refused to step down under pressure, will retain his role following the merger and report to Microsoft gaming chief Phil Spencer, according to Microsoft\u2019s announcement of the deal.<\/p>\n

Microsoft has been on an acquisition spree in recent years, with Chief Executive Satya Nadella looking to invest its $130 billion in cash reserves. In 2020 the company held talks about acquiring TikTok<\/a>, as the Trump administration pushed the Chinese social video app to sell to an American company, before that deal fell through. <\/p>\n

The video game industry has also been booming during the pandemic, with profits driven to new heights as consumers spend more time at home due to COVID-19 precautions, and has seen a number of mergers as studios look to invest. Last week, \u201cGrand Theft Auto\u201d creator Take-Two Interactive announced a deal to buy mobile game company Zynga for more than $11 billion. In 2021, Electronic Arts bought Codemasters, a racing game company, for $1.2 billion, and Microsoft bought Zenimax studios, the company behind \u201cDoom\u201d and the \u201cElder Scrolls\u201d and \u201cFallout\u201d franchises, for $7.5 billion in 2020.<\/p>\n

Microsoft\u2019s video game strategy depends on having exclusive in-house titles to build up its subscription service, Game Pass, which allows users to pay a monthly fee to access the company\u2019s catalog of games. That business is growing fast, from 10 million subscribers in April 2020 to 25 million in January 2022, and Spencer, Microsoft\u2019s gaming chief, has said<\/a> that he sees a major growth opportunity in Microsoft\u2019s cloud computing capability, which allows users to stream games on any computer, rather than requiring a powerful desktop machine or Xbox console.<\/p>\n

\u201cPlayers everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,\u201d Spencer said in the announcement. \u201cTogether we will build a future where people can play the games they want, virtually anywhere they want.\u201d<\/p>\n

Microsoft said that the deal is not expected to close until fiscal year 2023, with the expectation that regulators will take some time to examine the antitrust implications of the merger. In an open letter to employees, Activision CEO Kotick wrote that \u201cMicrosoft recognizes the commitment to excellence and creative independence that sets us apart, and we anticipate minimal changes for our workforce following the close of the transaction,\u201d and that the company will continue to operate independently of its new parent. <\/p>\n<\/div>\n