Microsoft has decided to go all-in on the metaverse with its largest acquisition ever, purchasing Activision Blizzard for a whopping $68.7 billion- the biggest in the company’s 47-year-history. In fact, it’s roughly equivalent to the sum of Microsoft’s five previous largest acquisitions combined- LinkedIn at $26 billion, Nuance at $19.7 billion, Skype at $8.5 billion, Bethesda at $7.5 billion, and GitHub at $7.5 billion.
Not only is an Activision Blizzard take-over the largest acquisition in Microsoft’s history;
It’s also the largest acquisition in the history of gaming, easily topping Take-Two’s purchase of Zynga for $12.7 billion last week.
Activision Blizzard games, which include some of the most popular entertainment franchises in any medium, with blockbuster titles such as Call of Duty, World of Warcraft, Overwatch, Diablo, and Candy Crush, has repeatedly broken industry records including being played by over 500 million people.
Metaverse Race Heats Up
This acquisition by Microsoft, along with their previous acquisitions of Bethesda in 2020 and Minecraft maker Mojang Studios in 2014, firmly plants Microsoft as the main challenger to Facebook “Meta” CEO Mark Zuckerberg as the leader in the metaverse race.
This deal does not come without its own baggage.
Activision has been plagued by controversy since last July when a California state agency filed a sexual discrimination claim alleging in explicit detail its “frat-boy culture,” and claiming leadership of failing to take action to stop it. The US Securities and Exchange Commission subsequently launched an inquiry into how Activision handled the allegations of misconduct.
The agreement will almost certainly face tough regulatory examination in the United States, where big technology firms are being investigated by regulators for their power and influence. China, which has been fighting with the United States over technology issues already, will also likely assess the merger.
The offer from Microsoft is a 45% premium over Activision’s closing price on Friday, January 14th. It’s a bargain, however, when compared with the stock’s performance in the first half of last year, before the sexual bias lawsuit plunged the firm into turmoil. In February, shares reached a high of more than $100 each and then lost almost half their value by December. The deal is expected to close in the fiscal year 2023.