On Tuesday, Microsoft announced that they will be purchasing “Call of Duty” creator Activision for $68.7 billion in the biggest gaming deal ever. With the deal in motion, Microsoft instantly becomes the third largest gaming company in the world, behind Tencent and Sony.
Microsoft is purchasing Activision for $95 per share, which is 45% over what the close price was on Friday. The deal represents big business’ bet on the “metaverse” in which other competitors such as Meta and Roblox are already heavily invested.
“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” said Satya Nadella, the Chief Executive Officer at Microsoft. “When we think about our vision for what a Metaverse can be, we believe there won’t be a single, centralized metaverse. It shouldn’t be. We need to support many metaverse platforms as well as a robust ecosystem of content commerce and applications.”
When Microsoft decided to take this deal, they also inherited some grief and problems recently affecting Activision.
On Monday, Activision announced that they have fired or pushed out more than three dozen employees and disciplined another 40 since July.
Last year, allegations of sexual harassment and other misconduct were brought against Activision. Allegations were also made against Activision CEO Bobby Kotick, stating that he knew of the sexual misconduct that was happening at the company. Even though multiple parties under Activision have already called for Kotick’s resignation, he is expected to step down as CEO when the deal is finalized.
“Until this transaction closes, Activision Blizzard and Microsoft Gaming will continue to operate independently,” said Phil Spencer, CEO at Xbox. “Once the deal is complete, the Activision Blizzard business will report to me as CEO, Microsoft Gaming.”
The deal to purchase Activision also comes with immediate benefits for Microsoft, including huge gaming franchises such as “Call of Duty” and access to Activision’s 390 million monthly users.
Microsoft already has an imprint in the gaming community with exclusive franchises such as “Halo”, but this purchase will help the company in its battle against its competitor, Sony’s Playstation, and gaming offerings from the Oculus, Meta’s VR gaming platform.
According to Newzoo, in 2020, Microsoft’s gaming market share was 6.5% in 2020, and adding Activision will take it to 10.7%.