Microsoft to buy Call of Duty maker Activision Blizzard for nearly $70bn

The Guardian - Tue Jan 18 14:28

Microsoft is to pay almost $70bn to buy Activision Blizzard, the publisher of mega franchises including Call of Duty, World of Warcraft and Candy Crush, in the company’s largest deal and the biggest ever takeover in the tech and gaming sectors.

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Microsoft said that the $68.7bn (£50.6bn) all-cash deal – which dwarfs its previous biggest, the $26bn takeover of LinkedIn in 2016 – will “provide the building blocks for the metaverse”. It is the biggest deal in tech history, eclipsing the $67bn paid by Dell to buy the digital storage giant EMC in 2015.

The deal will see the Xbox maker become the world’s third biggest gaming company by revenue behind China’s Tencent and Japan’s Sony, maker of PlayStation games consoles.

“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 chairman and chief executive of 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 make gaming safe, inclusive and accessible to all.”

The deal comes after a tumultuous time for Activision Blizzard, which has 10,000 staff globally a market value of about $50bn and three $1bn gaming franchises, which has been affected by a string of allegations of sexual misconduct and discrimination involving senior executives.

On Monday, the company said that it had fired more than three dozen employees and disciplined another 40 since July last year to address the allegations.

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Bobby Kotick, the chief executive of Activision Blizzard, will remain running the gaming business, which when joined with Microsoft will see the overall company run 30 internal games development studios. Microsoft said that the company’s strength in the rapidly growing mobile gaming sector was an important attraction of the deal.

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Gaming has been a pandemic winner as the lockdowns across the globe fuelled a boom in playing to alleviate boredom, which in turn has prompted a deal-making boom in the sector.

Last week, Take Two Interactive, the maker of hit video games including the Grand Theft Auto franchise, acquired Zynga, best known for its FarmVille and Harry Potter titles, in a $12.7bn deal creating a global console and mobile gaming giant.