Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion.  Upon the closing of the transaction, Microsoft will be the third-largest video game publisher in the world by revenue behind Tencent and Sony. The acquisition, which is set to finalize in July 2023, will be one of the biggest buyouts in history.

This will be the biggest acquisition in the history of video games, surpassing Take-Two Interactive’s announcement to buy Zynga for $12.7 billion a few days ago. This is also the biggest acquisition by Microsoft surpassing its $26.2 billion 2016 takeover of LinkedIn by a wide margin.

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The acquisition helps Microsoft to broaden its portfolio with shooter games like Call of Duty, acquire players involved in professional video gaming leagues, and the massive audience of mobile users, particularly in Asia. The Redmond, Washington company will have the biggest gaming franchises of all time, including Minecraft, The Elder Scrolls, Call of Duty and World of Warcraft.

With this Microsoft is also expected to make aggressive moves into the metaverse, a virtual world where ideas can be exchanged and digital goods can be sold, which has attracted a lot of enthusiasm after Facebook rebranded itself as Meta last year. Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.

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Over the years, Microsoft has slowly but steadily expanded its portfolio growing organically through X-box offerings, and by acquisitions like Rare Studios, Minecraft developer Mojang, etc. Last year, the company completed a $7.5 billion acquisition of ZeniMax Media, the holding entity of Bethesda Softworks, the game developer of “Fallout” and “Doom” franchises. In 2018, Microsoft acquired six studios:

• Compulsion Games, the developer of We Happy Few and prsently working on an unannounced third-person narrative game
• Ninja Theory, creator of the critically acclaimed Hellblade series
• RPG-centric inXile Entertainment, developer of Wasteland 3
• Obsidian Entertainment, maker of The Outer Worlds and the forthcoming first-person RPG Avowed
• Playground Games, an indie British game developer of the Forza Horizon series
• Undead Labs, developer of the State of Decay series.

In 2019, the software giant bought Psychonauts 2 developer SF-based Double Fine Productions. Accompanying the Activision acquisition announcement, Microsoft said its Game Pass announced in 2017 has reached a new milestone of over 25 million subscribers. “With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry,” the company said in a press release.

“If Call of Duty and all Activision-Blizzard games become Microsoft exclusives, it puts enormous pressure on Sony and all those who want to do ‘cloud gaming’ like Google, Amazon and Tencent,” Charles-Louis Planade, a video game expert at Midcap Partners, told AFP.