Microsoft to acquire Activision and become world’s third-largest game company

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CEO Satya Nadella said that the acquisition will provide Microsoft with building blocks for the metaverse.

Microsoft plans to snap up Activision Blizzard, the video game giant behind Call of Duty and Candy Crush, in a deal valued at $68.7bn.

While Microsoft is already a strong player in the gaming space with Xbox, the acquisition would make it the world’s third-largest video game company by revenue after Tencent and Sony.

Microsoft chief executive Satya Nadella said in an announcement today (18 January) that the acquisition will help the world’s largest software maker in the “dynamic and exciting” world of gaming, which 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,” he added.

Activision Blizzard is one of the world’s most well-known video game publishers. Founded in 2008 after the merger of Activision and Vivendi, the California-headquartered company has produced some major gaming franchise hits such as World of Warcraft, Diablo, Overwatch, Tony Hawk’s and StarCraft.

Bobby Kotick will continue to serve as Activision Blizzard chief executive, focusing on strengthening the company’s culture and accelerating business growth. He will report to Microsoft Gaming chief executive Phil Spencer once the deal is closed, which is expected in Microsoft’s 2023 fiscal year.

“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Spencer of the acquisition. “Together we will build a future where people can play the games they want, virtually anywhere they want.”

Microsoft has been taking big strides in the gaming space. In March 2021, it got approval from the EU to acquire video game company Bethesda for $7.5bn, in what was its largest ever gaming deal.

The acquisition of Activision Blizzard now dwarfs that purchase and Microsoft’s previous biggest deal overall – its $26bn acquisition of LinkedIn in 2016.

With nearly 10,000 employees in studios across the world, Activision Blizzard is a gaming behemoth – but not one without its share of controversies. It has been under fire in recent months for allegations of sexual harassment and misconduct, and earlier this week revealed that more than three dozen employees had been fired since last July.

In summer 2021, Activision employees protested the “abhorrent and insulting” response from company leadership to a lawsuit that exposed serious allegations. The following month, Blizzard Entertainment president J Allen Brack stepped down amid sponsor withdrawals, class-action lawsuits and further resignations.

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