Gaming world just got taken by storm with the potential acquisition of Activision Blizzard. News has been announced on the Microsoft official account this Tuesday in a $68.7 billion cash-only deal.
Activision Blizzard is one of the largest gaming companies in the gaming industry, known for its legendary Diablo, Warcraft and CoD series.
Activision's stock jumped 37% in pre-market trading before being suspended when the Wall Street Journal broke the news of the purchase. Following the announcement, Microsoft's stock dropped by more than 2%.
The stock of Activision Blizzard (NASDAQ:ATVI) has lost one-third of its value since the start of 2021 because of lawsuits against them by the Californian state. Harassment and misconduct against women were commonplace in Blizzard's working culture.
When Blizzard co-head Jen Oneal, ATVI's highest-ranking female executive, who had only been working at her position for three months unexpectedly quit, the stock's decline accelerated. Shares that were over $90 at the start of the year are were just around $60 before the purchase.
Following the announcement market shares jumped up with a whooping 18.70 USD (26.60%)
Activision CEO Bobby Kotick will stay on as CEO and report to Microsoft's Xbox head Phil Spencer, despite calls for him to leave over the company's culture issues.
Microsoft is expanding aggressively
Microsoft is expanding its gaming wing in an almost belligerent fashion. In 2014, it paid $2.5 billion for the creator of "Minecraft," Mojang. Microsoft also bought game developer Bethesda for $7.5 billion last year.
Activision will be valued at $68.7 billion, significantly more than the $26 billion Microsoft spent for LinkedIn in 2016. When the transaction is completed, Microsoft will be the "third-largest gaming firm by revenue, behind Tencent and Sony," according to the company.
Activision titles coming to Xbox Game Pass
Once the acquisition is finalized, Microsoft will add many of Activision's titles to Xbox Game Pass. Microsoft will soon be able to publish titles such as Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush thanks to its acquisition of Activision.
"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", Xbox CEO Phil Spencer adds.
Keeping the controversial Bobby Kotick as CEO
Microsoft’s decision to keep Bobby Kotick as CEO may backfire among the gaming community, after allegations of misconduct and harassment, especially against its women employees.
According to sources who spoke with Wall Street Journal there's a speculation going on about Bobby Kotick leaving the Activision once the deal closes.
Xbox CEO Phil Spencer comments: “We deeply value individual studio cultures. We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect. We hold all teams, and all leaders, to this commitment. We’re looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard.”
Microsoft will become the world’s third-largest gaming company
When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony and will rival the Asian giants. Microsoft also has plans on creating a virtual world like Meta in the near future.
They are surely becoming “the” cyberpunk corporation of our near future.
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