Microsoft buys Activision Blizzard for $68.7 billion

Microsoft buys Activision Blizzard for $68.7 billion – Activision, known for hit games like Call of Duty, Warcraft, Diablo, Overwatch, Tony Hawk, Hearthstone, Crash Bandicoot, and StarCraft has been embroiled in a scandal for several months following allegations of sexual misconduct and harassment among company leaders.

Activision announced Monday that it had fired dozens of executives following the investigation.

January 18, 2022 – With three billion people actively playing games today, and driven by a new generation immersed in the pleasures of interactive entertainment, gaming is now the largest and fastest growing form of entertainment. Today, Microsoft Corp. (Nasdaq: MSFT) announced plans to acquire Activision Blizzard Inc. (Nasdaq: ATVI), a leader in game development and interactive entertainment content publisher. This acquisition will accelerate the growth of Microsoft’s gaming business across mobile, PC, console, and cloud, and will provide the building blocks for the metaverse.

Microsoft will acquire Activision Blizzard for $95.00 per share, in a $68.7 billion cash transaction, including Activision Blizzard’s net cash. When the transaction closes, Microsoft will be the world’s third-largest gaming company by revenue, behind Tencent and Sony. The planned acquisitions include iconic franchises from studios Activision, Blizzard and King such as “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming. The company has studios around the world with nearly 10,000 employees.

Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company culture and accelerate business growth. Once the deal closes, Blizzard’s Activision business will report to Phil Spencer, CEO, Microsoft Gaming.

“Games are the most dynamic and exciting category of entertainment across all platforms today and will play a key role in the development of the platform metaverse,” said Satya Nadella, chairman and CEO, Microsoft. “We are investing heavily in world-class content, community and cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to everyone.”

“Players everywhere love Activision Blizzard games, and we believe the creative team has their best work ahead of them,” said Phil Spencer, CEO, Microsoft Gaming. “Together we will build a future where people can play the games they want, almost anywhere they want.”

“For more than 30 years, our incredibly talented team has created some of the most successful games,” said Bobby Kotick, CEO, Activision Blizzard. “The combination of Activision Blizzard’s world-class talent and outstanding franchise with Microsoft 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.”

Mobile is the largest segment in gaming, with almost 95% of all players worldwide enjoying gaming on mobile. Through a great team and great technology, Microsoft and Activision Blizzard will empower players to enjoy the most immersive franchises, like “Halo” and “Warcraft”, almost anywhere they want. And with games like “Candy Crush,” Activision Blizzard’s mobile business represents a significant presence and opportunity for Microsoft in this fast-growing segment.

The acquisition also strengthens Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone with more than 25 million subscribers. With nearly 400 million monthly active Activision Blizzard players in 190 countries and a $3 billion franchise, this acquisition will make Game Pass one of the most engaging and diverse ranges of gaming content in the industry. Once closed, Microsoft will have 30 in-house game development studios, along with additional publishing and esports production capabilities.

Microsoft buys Activision Blizzard for $68.7 billion

The transaction is subject to customary closing conditions and completion of regulatory review and Activision Blizzard shareholder approval. The deal is expected to close in fiscal year 2023 and will be added to non-GAAP earnings per share once it closes. The transaction has been approved by the boards of directors of Microsoft and Activision Blizzard.

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