Microsoft to acquire Activision Blizzard for $68.7 billion in an all-cash deal.
Microsoft’s Gaming business, which spans mobile, PC, console, and cloud, is growing because of legendary games, engaging interactive entertainment, and publishing expertise.
REDMOND, Wash. and Santa Monica, Calif. – Jan. 18, 2022 – Gaming is now the largest and fastest-growing type of entertainment, with three billion people actively playing games today, propelled by a new generation versed in the joys of interactive entertainment. Microsoft Corp. (Nasdaq: MSFT) announced today that it will buy Activision Blizzard Inc. (Nasdaq: ATVI), a leading game developer and publisher of interactive entertainment content. This acquisition will help Microsoft’s game business grow across mobile, PC, console, and cloud platforms, as well as supply metaverse building blocks.
Microsoft will pay $95.00 per share for Activision Blizzard in an all-cash deal for $68.7 billion, including Activision Blizzard’s net cash. Microsoft will overtake Tencent and Sony as the world’s third-largest gaming firm by revenue if the deal is completed. In addition to worldwide eSports activities through Major League Gaming, the projected acquisition includes legendary franchises from Activision, Blizzard, and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty,” and “Candy Crush.” The corporation employs almost 10,000 people in studios all over the world.
Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.
Quick gaming facts
- Gaming is the largest and fastest-growing kind of entertainment, with a market value of more than $200 billion.
- The overall number of video game releases in 2021 was up 64% from 2020, and 51% of players in the United States reported spending more than 7 hours per week playing on consoles, PCs, and mobile devices.
- Globally, 3 billion people play games currently, with 4.5 billion expected by 2030.
- Every month, over 100 million gamers play Xbox games on consoles, PCs, mobile phones, and tablets, with over 25 million Xbox Game Pass subscribers.
“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, chairman and CEO, Microsoft. “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”
“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Phil Spencer, CEO, Microsoft Gaming. “Together we will build a future where people can play the games they want, virtually anywhere they want.”
“For more than 30 years our incredibly talented teams have created some of the most successful games,” said Bobby Kotick, CEO, Activision Blizzard. “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.”
Mobile gaming is the most popular, with approximately 95 percent of all players worldwide using their phones to play games. Microsoft and Activision Blizzard will enable gamers to enjoy the most immersive franchises, such as “Halo” and “Warcraft,” almost anywhere they desire thanks to excellent teams and outstanding technology. Activision Blizzard’s mobile business, with games like “Candy Crush,” represents a substantial presence and opportunity for Microsoft in this fast-growing area.
With plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million members, the acquisition significantly strengthens Microsoft’s Game Pass catalog. This acquisition will give Game Pass one of the most engaging and diverse portfolios of gaming content in the industry, thanks to Activision Blizzard’s over 400 million monthly active gamers in 190 countries and three billion-dollar franchises. Microsoft will have 30 internal game development studios, as well as extra publishing and esports production capabilities when the deal is completed.
The deal is subject to standard closing conditions, including regulatory approval and shareholder approval from Activision Blizzard. The transaction is planned to complete in the fiscal year 2023 and will be non-GAAP earnings per share accretive at that time. Both Microsoft and Activision Blizzard’s boards of directors have given their approval for the deal.
Goldman Sachs & Co. LLC is serving as financial advisor to Microsoft and Simpson Thacher & Bartlett LLP is serving as legal counsel. Allen & Company LLC is acting as financial advisor to Activision Blizzard and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.