Microsoft is acquiring Activision, the publisher of Call of Duty, World of Warcraft, and Diablo. The deal will value Activision at $68.7 billion. It’s Microsoft’s biggest push into gaming, and the company says it will be the “third-largest gaming company by revenue, behind Tencent and Sony” once the deal closes.
The biggest video games in the world are largely found on smartphones, and for the last few years, major publishers have been spending lots of money to get into the space. Just this month, Take-Two — the company behind the likes of NBA 2K and Grand Theft Auto — spent nearly $13 billion to acquire FarmVille developer Zynga. Before that, EA scooped up the likes of Glu Mobile and Playdemic for smaller, but still massive, sums. Years earlier, when Activision Blizzard wanted to get a leg up in mobile, it spent $5.9 billion on Candy Crush creator King.
Microsoft plans to add many of Activision’s games to Xbox Game Pass once the deal closes. With the acquisition of Activision, Microsoft will soon 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.
Activision Blizzard is home to three billion-dollar and the company boasts close to 400 million monthly active players. And almost 10,000 employees. Once the acquisition is complete, Microsoft will have 30 game development studios along with decades of experience in game publishing.
Bobby Kotick will remain as CEO of Activision Blizzard, for now at least. However, once the deal closes, Activision Blizzard will report to Spencer as CEO. Kotick faced some pressure to resign when the company came under criticism after former employees alleged sexual misconduct and harassment by executives. This Monday dozens of execs were fired, dozens more were officially reprimanded.
The deal is expected to close later this year, following the usual regulatory review and approval. The boards of directors of both companies already agreed to the acquisition.