Forward-looking: Microsoft is buying Activision Blizzard in what would be the company's largest acquisition to date. Valued at $68.7 billion, the deal will likely change the video game landscape and elevate Microsoft to become the world's third-largest video game company.
Microsoft today announced it is acquiring Activision Blizzard, the well-known video game publisher behind franchises like Call of Duty, Warcraft, Diablo, Candy Crush, and Hearthstone. The all-cash deal is valued at $68.7 billion, which makes it the largest acquisition in the company's history.
Previously, Microsoft bought LinkedIn in 2016 for $26.2 billion, and last year it paid $19.7 billion for Nuance Communications. As part of the deal, Microsoft will get Activision Blizzard's nearly 10,000 employees and will likely become the third most valuable video game company only behind giants Tencent and Sony. It will also grow its publishing and esports production capabilities to a total of 30 internal game development studios.
In addition to inheriting all intellectual property and development resources, Microsoft is planning to add Activision's game roster to Xbox Game Pass once the deal closes.
Xbox Game Pass has grown to 25 million subscribers, a healthy increase from the 18 million it reported in January last year. In 2021, Xbox Game Pass added 20 Bethesda titles to its catalog, and now that catalog is growing with several popular titles that have a combined 400 million active players across 190 countries.
Activision Blizzard has been under a lot of legal and public pressure over the last few months as a result of allegations of sexual misconduct and unfair pay for temporary workers.
Microsoft has yet to reveal how it will deal with these concerns, but in the meantime Bobby Kotick will continue to serve as CEO of Activision Blizzard. Once the deal closes, the Activision Blizzard business will report directly to Microsoft Gaming CEO Phil Spencer, which seems to suggest he might not remain after that.
Microsoft Gaming is a new division that will tackle the company's gaming ambitions across Xbox, PC, mobile, and the cloud. CEO Satya Nadella said in a statement that "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."