Microsoft’s Acquisition of Activision Blizzard

Technology giant Microsoft has acquired Activision Blizzard, a leader in interactive content and game development. This will accelerate Microsoft’s growth in the gaming industry across all platforms and the metaverse. Around 400 million people play games owned by Activision Blizzard, and all these people have become Microsoft’s newest clients. 

Microsoft bought Activision Blizzard for 68.7 billion US dollars, including the company’s net cash. From the stock market perspective, Microsoft paid 95 dollars per share. The impact of this transaction is seen in the rise in share price of Activision Blizzard, which rose from 64.17 dollars to 81.50 dollars over the course of the past month. On the contrary, Microsoft shares have fallen from 304.80 dollars to 295.04 dollars over the same time period. I believe this occurred because Microsoft paid exorbitantly to acquire Activision Blizzard, an excess of 13.50 dollars per share. 

After this transaction completes, Microsoft will be the third largest gaming company by revenue, behind Tencent and Sony. Almost 10,000 employees around the world were positively affected by this take over. Bobby Kotick, CEO of Activision Blizzard says, “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.”

Microsoft’s plan is to enhance their Game Pass on their Xbox consoles by adding the Activision Blizzard games to it. The Gold Pass is a monthly subscription to gain access to showcased games and online play. With attractive games, such as ‘Halo’, ‘Warcraft’, ‘Call of Duty’, and ‘Overwatch’, being added to the Gold Pass, many more gamers would choose to subscribe to it, increasing the revenue earned for Microsoft. 

To cater to the larger audience of mobile gamers, which accounts to roughly 95% of all gamers, preexisting games like ‘Candy Crush’ will be accompanied by newer mobile versions of immersive games ‘Warcraft’ and ‘Halo’. This allows gamers to play on the go, something that will always be profitable as it makes gaming more accessible and convenient for consumers. 

In conclusion, Microsoft makes a big move into the gaming sector, buying one of the largest companies with a rich collection of extremely successful games for all platforms: computers, consoles, and mobile devices. Besides the monetary value of two great companies now becoming one, the overall excellence in gaming will grow further. Competing companies will also give it their best, and this competition in such a popular market will only improve the virtual experience for consumers. 

Written and collated by Neel Mehta
Written with input from Microsoft News and Moneycontrol

Friday February 13th 2022