Microsoft overnight has announced the biggest deal in the tech sector's history, buying Activision Blizzard for US$68.7 billion.
It exceeds even Dell's $67 billion acquisition of EMC in 2015.
The game development leader and entertainment content publisher is famous for its popular video game franchises, including World of Warcraft, Call of Duty, Diablo and Candy Crush. The acquisition will surge Microsoft to the top of the gaming leaderboard, making it the third-largest gaming company globally, following Tencent and Sony.
According to Satya Nadella, chairman and CEO of Microsoft, “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.”
“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.”
The gaming industry is the largest and fasted growing form of entertainment, estimated to be worth more than US$200 billion globally.
Activision Blizzard employees will report to Microsoft Gaming CEO Phil Spencer when the deal closes in 2023, but until then will continue to report to Activision Blizzard’s current CEO Bobby Kotick.
According to Spencer, “Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them.”
“Together we will build a future where people can play the games they want, virtually anywhere they want.”
The company is still under fire for allegations of workplace sexual harassment and assault which has led to a number of lawsuits and federal investigations against Activision, and calls for Kotick to resign.
The Wall Street Journal reported in November 2021 that the CEO knew of rape allegations and sexual misconduct in the company despite Kotick telling Activision Blizzard’s board of directors at the time that he was unaware.
Speaking on the gaming deal, Kotick said, “The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”