Microsoft is on a purchasing spree in recent years, and they have been purchasing multiple video game publishing studios in multi-billion dollar deals to build up the Xbox arsenal. Last year, they purchased Zenimax Online Studios, the publishers behind the highly successful series of Doom, Fallout, and The Elder Scrolls. They also have acquired Minecraft’s maker, Mojang Studios, recently. However, it doesn’t seem like they are stopping anytime soon. On January 19th, they declared the acquisition of the video gaming industry giant, Activision Publishing. This deal is going to be one of the largest in video gaming history and will set Microsoft as one of the big players in the industry.
Highlights of the Deal
Here are key details of this record-breaking deal:
- The deal is valued at a hefty premium of $68.7 billion. It will be an all-case agreement.
- Microsoft is offering $95 per share. This is 45% more than what Activision is currently valued at. The share went up recently by 27% and were at $83.11 last Friday close.
- The addition of Activision and its library would set Xbox a level over Sony’s PlayStation. Sony has been adding quality titles to their library over the years. They have also been increasing the number of developing studios under PlayStation Studios.
- This acquisition will also give Microsoft a fair chance against Meta’s upcoming Metaverse. As a competitor, Activision and its assets will help the company create immersive and interactive worlds, much like what Mark Zuckerberg demonstrated last year.
- This addition will also push Microsoft’s market share by percentage from 6.5% in 2020 to 10.7%. It will help Microsoft become the third-largest video game company in the world in terms of total global revenue, just after Sony and Tencent games.
- Microsoft is looking forward to adding most of Activision’s new and old games to the Xbox Game Pass subscription. The addition of Activision’s rich titles will skyrocket the value of this subscription.
The Main Reason Activision is Getting Sold
Activision has been facing severe issues over the last year as they have been accused of sexual harassment of employees. Their market value has been on a steady slope. Things weren’t looking good for the publishing even though they took measures against said developments. Activision has reportedly fired over 30 employees and disciplined over 40 more since the cases surfaced in July 2021. Microsoft also ensures the success of this deal will depend on Activision’s ability to contain the disciplinary issues.
What are Some Best Titles from Activision?
Some greatest titles Activision has to offer are:
- Call of Duty: One of the largest and greatest long-running first-person shooter titles of all time.
- Overwatch: Multiplayer e-sports title, it also received the Game of the Year award in 2016.
- Tony Hawk’s Pro Skater: Arguably the best skating series out there.
- Prototype: A critically acclaimed open world action-adventure video game series, discontinued after Prototype 2 (2012).
- Candy Crush: One of the most popular Android and iOS games out there. The game has also been released on Microsoft Windows recently.
- Spyro: A classic platformer video game, recently rebooted to critical praise.
- Sekiro: An action adventure game from 2019, it won the Game of the Year Award.
Not all games published by Activision will get added to Microsoft’s arsenal. Sekiro is not making it to Microsoft in the deal because IP (Intellectual Property) rights are owned by From Software, the developer of the game, not Activision.
What Microsoft’s CEO Satya Nadella Has to Say on the Acquisition
Microsoft CEO Satya Nadella stated, “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.”
Activision’s New CEO: Phil Spencer
Phil Spencer, who has headed the Xbox division of Microsoft to date since 2014, will now take over as the head of Microsoft gaming. Every other studio, including Activision’s business unit, will report to him. This is what Phil has expressed about the acquisition, “Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog.”
The acquisition is the largest deal ever in video gaming history. It even surpasses Microsoft’s acquisition of LinkedIn for $26 billion and Take Two’s acquisition of Zynga, a mobile video game publisher, for over $11 billion. It is going to set Xbox at par with Nintendo and Sony, as it will add a huge catalog of popular games to the console’s exclusive library.
Although Microsoft has stated they have no intentions of splitting the community the current titles have across several platforms, future titles might become exclusives and launch only on Xbox consoles and PC. This has happened with The Elder Scrolls series and might continue for future Call of Duty titles too.