Microsoft’s big bet on metaverse, to acquire Activision Blizzard for $68.7 billion
The deal plants Microsoft’s flag in the emerging battle for dominance in the so-called metaverse, the next-generation internet that melds the traditional online world with virtual and augmented reality.
FollowMicrosoft just made one of the largest-ever bids for a game studio as it announced Monday that it has a deal to take over video-game giant Activision Blizzard Monday, in an all-cash deal valued at $68.7 billion. The company said it will be the “third-largest gaming company by revenue, behind Tencent and Sony” once the deal closes.
Activision Blizzard is the video game maker behind hits like Call of Duty and Candy Crush, and this is the largest takeover in Microsoft’s 46-year history and a big bet on its future direction.
The deal plants Microsoft’s flag in the emerging battle for dominance in the so-called metaverse, the next-generation internet that melds the traditional online world with virtual and augmented reality.
Microsoft is already a behemoth in the video-game industry through its Xbox hardware and longtime interest in buying up video-game development studios. With Activision Blizzard, it is taking on one of the industry's biggest developers while it is mired in scandal, facing accusations of discriminating against its female workforce and fomenting a “frat boy” workplace culture.
The buyout is expected to close sometime in Microsoft's fiscal 2023 (no later than June 2023) if regulators and Activision Blizzard shareholders greenlight the move. The boards of directors for both companies have already approved the deal.
Meanwhile, in buying Activision, which faced accusations of sexual harassment and discrimination that senior executives ignored, Microsoft appears to be rebuffing a controversy about the game maker’s workplace culture. The allegations have weighed on Activision, with its shares falling 27 per cent since California sued the company in July over the matter. The game maker’s shares are up nearly 40 per cent in premarket trading. Microsoft’s shares fell by 1 per cent after the announcement.
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