On 19 January 2022, tech giant Microsoft announced their acquisition of Activision Blizzard for $68.7 billion.
Once the purchase is consolidated in 2023, it will mark the biggest acquisition in Microsoft’s history and indicate its push to grasp an ever-growing market.
Valued at $2.3 trillion, Microsoft will become the third most prominent gaming company behind Tencent and Sony after they acquire Activision Blizzard.
Why Activision Blizzard
After the acquisition of Activision Blizzard, Microsoft will have Call of Duty, mobile gaming juggernaut Candy Crush and, a total of 34 game developing companies in their portfolio.
In 2014, Microsoft purchased Minecraft studio Mojang for a relatively small $2.5 billion. In 2021 a similar trend was followed, and Microsoft bought out Zenimax, the holding company of Bethesda, for $7,5 billion.
When questioned about the Activision Blizzard acquisition, Microsoft CEO Satya Nadella said, “Gaming is the most dynamic and exciting category in entertainment that will play a key role in the development of metaverse platforms.”
A comprehensive library of games may help Microsoft’s Xbox, which is in competition with Sony’s PlayStation. Specific titles are rumoured to become Xbox Game Pass exclusives. However, it is to0 early to tell.
Hurdles faced
Mergers of this scale require approval by the United States’ Federal Trade Commission and other regulatory bodies.
Approval is often granted. However, financial analysts have questioned whether this acquisition will be without hurdles.
This is due to the Federal Trade Commission and EU becoming more aggressive in defending against the monopolisation of industries by big tech.
Microsoft will also need to restore the public’s opinion of Activision to bring back customers.
Sexual Assault Scandal
Activision Blizzard has been shrouded in sexual misconduct scandals, leading to employees walking out and Activision losing esport sponsorship deals.
The California Department of Fair Employment and Housing filed a lawsuit against Activision Blizzard in July 2020, alleging sexual harassment and assault.
Microsoft has taken the allegations very seriously and indicated that they intend on creating a better work environment within Activision Blizzard.
How this affects Sony
Players of Call of Duty and other Activision titles are concerned that Xbox Game Pass will make their beloved games Xbox exclusives. However, Microsoft is said to have “no intention to pull people away from their communities.”
Phil Spencer detailed in a Tweet:
Had good calls this week with leaders at Sony. I confirmed our intent to honor all existing agreements upon acquisition of Activision Blizzard and our desire to keep Call of Duty on PlayStation. Sony is an important part of our industry, and we value our relationship.
— Phil Spencer (@XboxP3) January 20, 2022
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