Last week, Microsoft Corp. announced plans to acquire global video game giant, Activision Blizzard Inc., to accelerate their growth in the gaming business across mobile, PC and console platforms.
Activision Blizzard Inc. has nearly 400 million active users per month in 190 countries and is comprised of Activision, Blizzard and King studios. Those studios created some of the most iconic video game franchises such as, “Call of Duty,” “Candy Crush,” “World of Warcraft” and “Overwatch.”
As a tech conglomerate, Microsoft has their foot in the door of many different industries. Gaming however, is the world’s leading and fastest growing form of entertainment with over 3 billion people playing today. Microsoft is the creator of XBOX and, for years, have been developing their own hit franchises, such as “Halo” and “Forza.”
When the deal becomes official, Microsoft will surpass Nintendo to become the world’s third-largest gaming company by revenue, behind Tencent and Sony. According to their press release, Microsoft plans to use these new assets to strengthen their “Game Pass,” Microsoft’s video game subscription service, which already has over 25 million subscribers. The move is also intended to provide building blocks for the metaverse.
Microsoft will acquire Activision Blizzard for $95 per share, valued at a total of $68.7 billion. The deal is expected to close in the fiscal year of 2023 and has already been approved by the board of directors of both companies. CEO of Activision Blizzard, Bobby Kotick, will maintain his position with the company but once the deal closes Activision will report to the CEO of Microsoft Gaming, Phil Spencer.
“The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry,” Kotick said in a statement.
Activision Blizzard has over 10,000 employees located in studios across North America, Europe, Asia and Australia.
The deal will have a ripple effect on the gaming world and, more specifically, the “console wars.” With XBOX and PlayStation dominating the gaming console industry, Microsoft and Sony have been battling it out for the world’s top selling product for years. In 2021, Sony became the biggest video game company in the world with a value of $25 billion, thanks to their “PS5” being the best selleing console and in extremely high demand.
One effective strategy for these companies is to make some of their popular games exclusive to their own platform. Sony’s legendary, exclusive franchises include “God of War,” “Spider-Man” and “Last of Us.” Microsoft’s notables include the “Forza” and “Halo” series but, with their acquisition of Activision Blizzard, speculation has risen about whether any of their new games will become exclusives.
In an effort to ease the damage of their declining stock following the announcement of the Microsoft deal, Sony released a not-so-congratulatory statement.
“We expect that Microsoft will abide by contractual agreements and continue to ensure Activision games are multiplatform,” a Sony spokesperson said to the Wall Street Journal.
The good news for Sony gamers is that Phil Spencer released an optimistic, yet vague, statement on the topic.
“I’ll just say to players out there who are playing Activision Blizzard games on Sony’s platform: It’s not our intent to pull communities away from that platform and we remain committed to that,” Spencer said.
It seems fairly certain that current Activision Blizzard games will not become Microsoft exclusives, but it remains to be seen what will happen when new games are released and fresh franchises are created.
Video Game expert Paul Tassi of Forbes believes it’s unlikely that Microsoft would make a deal where every future Activision Blizzard game is released on Playstation. We’ll soon find out if another “war” is brewing between the two companies.
Many details of this deal are still unreleased. However, for the foreseeable future, fans of Activision Blizzard can continue to enjoy games on either XBOX or Playstation consoles but it’s unclear how long that will last.
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