Microsoft announced plans to acquire the video game publisher, Activision Blizzard, on January 18, 2022, in an all-cash transaction reported to be valued at $68.7 billion.
The deal gives the tech giant popular game franchises, such as World of Warcraft, Call of Duty, Overwatch, Diablo, and many more to add to its arsenal. This acquisition sets Microsoft up to be the third-largest gaming company by revenue. Microsoft expects the deal to close in the 2023 fiscal year (which begins in July of this calendar year) once the customary closing conditions have been completed along with the regulatory review and Activision Blizzard’s shareholder approval. Both Microsoft and Activision Blizzard’s board of directors have already approved the deal.
This deal comes in hot on the heels of an avalanche of issues surrounding sexual harassment where 37 employees have reportedly left Activision Blizzard according to this article on The Verge. Microsoft states that 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’s culture and accelerate business growth. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.
Phil Spencer, the CEO of Microsoft Gaming, posted both Activision and Microsoft Gaming will continue to operate independently until the deal is complete with Activision Blizzard then all business will be reported to Spencer.
“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,” said Satya Nadella, chairman and CEO, Microsoft. “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.”
Maybe you noticed the not-so-subtle hint regarding the Metaverse by Microsoft’s chairman and CEO Satya Nadella, but it seems everyone is quick to mention to the public and or other companies listening that they are gearing up to bring their A-game to the Metaverse. Whatever that ends up being.
In the meantime, we can predict some of the possible changes to come from this buyout. Microsoft currently has Game Pass, their subscription-based model for Xbox, which recently hit 25 million subscribers. Now’s the time to sign up for the Game Pass subscription before prices go up to match the revamped gaming inventory. Microsoft could potentially lock down new releases and not deliver them on other platforms, i.e., PlayStation, giving them exclusivity and driving subscription sign-ups.
Whatever ends up happening, Microsoft is making big moves to not be left behind in the gaming world or the Metaverse.