Microsoft is reportedly in the process of acquiring Activision Blizzard for USD 68.7 billion. It would be the highest price ever paid by a U.S. tech company in an acquisition—as the biggest prior deal was when Dell purchased EMC for USD 67 billion in 2016. So, why is Microsoft spending that much on a video game company?
According to the company, Microsoft aims to be the “third-largest gaming company by revenue, behind Tencent and Sony” once the deal closes. They also plan to add many of Activision’s games to Xbox Game Pass—to publish franchises like Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush.
“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,” says Microsoft’s CEO of gaming Phil Spencer.
The acquisition of these huge game franchises would instantly give Microsoft a huge audience in the mobile gaming world. Some of the biggest video games in the world can be played on your smartphone—the top three most-played video games are free-to-play mobile games from Tencent, including PUBG.
Right now, Microsoft is doing pretty good as they are with Minecraft—a game Microsoft acquired by buying Mojang Studios. The game is currently the number one best-selling video game of all time. The mobile version of Minecraft has even been downloaded more than 237 million times on both iOS and Android since January 2014. Fallout Shelter, after their acquisition of Bethesta, is also a fairly popular mobile game.
However, their other efforts aren’t as successful, as they had to shut down Minecraft Earth—the Minecraft version of Pokemon Go. Microsoft is also planning to close their mobile racer game Forza Street, as “the team shifts its focus to new and exciting Forza experiences”.
Xbox Game Pass now has a whopping 25 million subscribers, but the acquisition could give Microsoft a much bigger boost. The Activision Blizzard deal, however, isn’t expected to close until “fiscal year 2023”.
This could also give Activision Blizzard a new makeover after the company’s employees have come forward with allegations of sexual misconduct and gender-based discrimination. Even though a settlement is being appealed, reports indicate that nearly 40 Activision Blizzard employees have reportedly “exited” the company since July 2021.
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