Microsoft just made one of the biggest deals ever for a game studio. The company announced its intention to acquire Activision Blizzard for $95 per share, valuing the all-cash deal at $68.7 billion. The deal would make the combined entity the “third largest” games company by revenue, according to Microsoft, and bring titles like Call of Duty, World of Warcraft and Candy Crush under the company’s wing. Microsoft plans to add Activision Blizzard games to Game Pass as part of the deal.
Mobile gaming is also a big factor in the acquisition, Microsoft said. Along with integrating King’s phone games into Microsoft’s business, the purchase promises to bring franchises like Halo and Warcraft to more devices.
The takeover is expected to close in Microsoft’s 2023 fiscal year (no later than June 2023) if regulators and Activision Blizzard shareholders give the go-ahead. The boards of both companies have already approved the deal.
Although news of the acquisition comes as Activision Blizzard is still embroiled in a misconduct scandal, you shouldn’t expect any major leadership changes. Bobby Kotick will remain the CEO of Activision Blizzard despite calls for his resignation, and will now report to Microsoft Gaming chief Phil Spencer. In a corporate letter, Kotick described Microsoft’s move as a chance to “further strengthen” Activision Blizzard’s corporate culture and “set a new standard” for inclusivity. He did not outline any specific plans for reform, but said there would be “minimal changes” in the number of employees once the union ended.
If it goes ahead, the merger would help Microsoft compete with heavyweights Tencent and Sony, both of which have been buying sprees in recent months. Kotick has also seen it help his company better compete as metaverse gaming grows in prominence. In this light, it can be as much a question of the sustainability of the company as anything else.
Some major questions remain, however. Microsoft hasn’t specified how many Activision Blizzard games will be Xbox-exclusive on consoles or Windows-exclusive on PCs. It’s also unclear to what extent Microsoft might influence the development of key franchises. It’s uncertain whether Microsoft will lock Call of Duty or other giant games onto the Xbox in the near future, however — PlayStation sales account for a large chunk of Activision Blizzard’s revenue, and the abandonment of that platform ‑form would significantly reduce the company’s influence in the games industry.