It’s a totally cash deal
The deal announced by Microsoft is an outright cash acquisition. Microsoft’s $95 per share offer represents a 45% premium to Activision’s Friday close. Shares of Activision were last up 27% at $83.11.
What Activision Blizzard brings to the table for Microsoft
- The $68.7 billion full-cash deal will replace Microsoft, the maker of
xbox Gaming Systems, one of the largest video game companies in the world. - This will help the company compete with tech rivals like Meta, formerly Facebook, in creating immersive virtual worlds for both work and play. Facebook is considered a pioneer in the so-called metaverse, the name given to the virtual world.
- Activision’s library of games could help give Microsoft’s Xbox gaming platform an edge over Sony’s Playstation, which has enjoyed a more steady stream of exclusive games for years.
- According to Newzoo, Microsoft’s gaming market share was 6.5% in 2020 and adding Activision is expected to take it to 10.7%.
- The acquisition left Microsoft behind Nintendo as the third-largest video game company by global revenue after Sony and Chinese tech giant Tencent.
- Microsoft said the acquisition will help it increase its Xbox Game Pass game subscriptions.
Microsoft CEO Satya Nadella Is An Acquisition
Microsoft Chief Executive Satya Nadella said, “Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the growth of the Metaverse platform.”
Who will lead the new division
The Activision business unit will then report to Phil Spencer, who has headed Microsoft’s Xbox division and will now serve as CEO of Microsoft Gaming. Phil Spencer, Microsoft’s CEO of gaming, says, “When closer, we’ll be offering a number of Activision Blizzard games in the form of Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog.”
Anti-trust investigations could lead to Microsoft, similar to Google and Facebook
Microsoft has so far managed to avoid the type of scrutiny faced by Google and Facebook. However, this deal will make it the third largest gaming company in the world. This could put it on the radar of anti-trust regulators in the US and Europe. However, Microsoft has reportedly agreed to pay a $3 billion break-fee if the deal fails, suggesting it is confident of winning antitrust approval.
What Are Activision Blizzard’s Biggest Hits?
The biggest games are: Call of Duty and Candy Crush,
Activision is facing allegations of sexual harassment of Blizzard employees
The company is facing allegations of sexual harassment and misconduct of employees by several top managers, which has led to a huge drop in its shares. The company is still addressing those allegations and says it has fired or fired more than three dozen employees and disciplined 40 others since July. In a conference call with analysts, Microsoft CEO Nadella said, “It is important for Activision Blizzard to pursue its renewed cultural commitments,” adding that the success of this acquisition will depend on it.
Microsoft is building out the gaming arsenal
Microsoft is making inroads in this area. It has been investing in recent years, including buying “Minecraft” maker Mojang Studios and Zenimax in multibillion-dollar deals. Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, which is behind the popular video games The Elder Scrolls, Doom and Fallout.
,