Microsoft acquiring Activision Blizzard in $68.7B gaming deal

Posted:
in General Discussion edited January 18
Software giant Microsoft has agreed to purchase Activision Blizzard, a major acquisition valued at $68.7 billion that combines many major studios under one entity.




Announced on Tuesday, the deal with see Microsoft acquire Activision Blizzard for $95 per share in an all-cash transaction. The $68.7 billion valuation is inclusive of Activision Blizzard's net cash.

Once completed, the acquisition will turn Microsoft into the world's third-largest gaming company by revenue, behind Tencent and Sony. Bobby Kotik will continue to operate as CEO of Activision Blizzard, and will report to Microsoft Gaming CEO Phil Spencer.

The purchase will see Microsoft take ownership of many Activision, Blizzard, and King studio franchises, including "Warcraft," "Diablo," "Overwatch," "Call of Duty," and "Candy Crush."

"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."

Activision Blizzard's support for the Mac has waxed and waned over the years. Historically, Blizzard by itself had better support for macOS than Activision Blizzard does. Obviously, the King properties that are part of the deal like "Candy Crush" are well supported on iOS and iPadOS.

Microsoft says that it will use the catalog to bolster its GamePass offering. One aspect of Gamepass, its Xbox Cloud Gaming service (previously known as xCloud), is available on iPhone and iPad through Safari.

GamePass currently has over 25 million subscribers. As Activision Blizzard has nearly 400 million active players in over 190 countries, this could give Microsoft a considerable subscriber bump down the road.

The announced deal follows after a similar consolidation between gaming companies. On January 10, Take-Two Interactive announced a $12.7 billion deal to acquire mobile gaming giant Zynga.

Activision Blizzard is also in the midst of a scandal over a culture of sexual harassment and misconduct within the company.

The deal is not certain, as it needs to pass regulatory review and approval from Activision Blizzard's shareholders. It has already been approved by the boards of directors for both Microsoft and Activision Blizzard.

In pre-market trading, Activision Blizzard stock jumped to just less than $90.

If it goes through, the transaction is anticipated to close in the 2023 fiscal year. However, if it fails to pass, Microsoft faces paying a "break-up" fee of around $3 billion. The deal is likely to face opposition by the US Government, given its stance over the last two years regarding big tech acquisitions and consolidations.

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Comments

  • Reply 1 of 76
    red oakred oak Posts: 929member
    This screams anti-trust if they have any intention of making Call of Duty exclusive to Xbox and PC.    Half of company’s revenue is generated on PlayStation and mobile.I don’t see the point in Microsoft buying it.

    Microsoft has a horrible M&A record.  It is where company’s go to die 
    rotateleftbytehydrogenwilliamlondoncat52badmonk
  • Reply 2 of 76
    amar99amar99 Posts: 108member
    Another one bites the dust. Also don't like what making gaming "safe, inclusive and accessible to all" means in this context, as if they want to make every game desirable to every person without causing "offense" (an increasingly difficult word to define in America.)

    If Steve Balmer were still with MS, he'd be out there summoning an otherworldly strength as he shouted "Gamers! Gamers! Gamers!" till he was blue in the face.
    edited January 18 byronlchadbagcat52Beatsviclauyycelijahg
  • Reply 3 of 76
    red oak said:
    This screams anti-trust if they have any intention of making Call of Duty exclusive to Xbox and PC.    Half of company’s revenue is generated on PlayStation and mobile.I don’t see the point in Microsoft buying it.

    Microsoft has a horrible M&A record.  It is where company’s go to die 
    If they are the third largest game company after this then it’s somewhat hard to see where the anti-trust complaint would be. They aren’t a gaming monopoly so it would need to be some other provision of the Sherman Act. Not really a cartel since it is all one company. Perhaps product bundling depending on what they do in the future. Simply nixing COD for PlayStation wouldn’t quality. Game exclusives exist already and there is nothing inherently illegal about that. 
    mike1shareef777byronlBeatsviclauyyc
  • Reply 4 of 76
    mike1mike1 Posts: 2,948member
    red oak said:
    Half of company’s revenue is generated on PlayStation and mobile.I don’t see the point in Microsoft buying it.

    Microsoft has a horrible M&A record.  It is where company’s go to die 

    Umm, maybe because they'd like a slice of that business. Just sayin'.
    byronl
  • Reply 5 of 76
    lkrupplkrupp Posts: 9,988member
    Maybe the rumors of Microsoft spinning off Office and Windows is more than a rumor.
    edited January 18 rezwitsbyronl
  • Reply 6 of 76
    An interesting coda in the history of Activision, probably the oldest independent gaming company (meaning one who didn't make their own console system). They date back to the Atari 2600 system introduced in the late 70s, making games for that console (and drawing the ire of Atari at that time). Electronic Arts wouldn't be a thing for a few more years.
    byronlOctoMonkey
  • Reply 7 of 76
    This is the type of acquisition that Apple really needs to make.  Apple just doesn't get the gaming market or simply has no interest in it.  Small indie games in Apple Arcade are fine, but Apple's platforms need A list games.  Apple has great hardware with the M1 Max but a poor gaming selection.  Ironically, Mac sales are at record levels now, but gaming on the Mac is worse than any time in history.  Sad.  
    byronlwaveparticleblastdoorwilliamlondoncat52Beatsuraharaelijahg
  • Reply 8 of 76
    red oak said:
    This screams anti-trust if they have any intention of making Call of Duty exclusive to Xbox and PC.    Half of company’s revenue is generated on PlayStation and mobile.I don’t see the point in Microsoft buying it.

    Microsoft has a horrible M&A record.  It is where company’s go to die 
    Did you even READ the article!? IF this deal goes through, it would put them into THIRD place. As for exclusivity, that's how it works. Did you harp about how all the Sony exclusive content!? What about Sony limiting Spider-Man games to the Playstation only? This is how IP works.
    byronlwilliamlondonviclauyycbeowulfschmidt
  • Reply 9 of 76
    When Google and Microsoft first launched Stadia and xCloud and were not allowed to put their apps in the app store, an Apple Insider pooh-poohed the development stating "cloud gaming is going to fail anyway." Well now xCloud alone has 25 million subscribers. Nvidia GeForce Now had 12 million subscribers at last count. And at last report - which was way back in 1Q 2020 - Amazon Luna and Google Stadia had 2.5 million subscribers apiece. (Plus you can simply buy Stadia games without bothering with a subscription.) By comparison the streaming service Hulu has 43 million subscribers, and in mid-July Apple TV+ was estimated to have less than 20 million subscribers (which Apple does not dispute, and they state that they HOPE to have 36 million subscribers in 2026!). 

    Not saying that Apple should have allowed game streaming apps into their app store. But the idea "who cares: game streaming isn't going to catch on anyway" was a very bad take. If Microsoft wasn't happy with the initial response to xCloud, there is no way that they would have doubled down by spending $70 billion on Activision Blizzard. And no, the antitrust types aren't going to block it. 
    byronlwilliamlondonviclauyycroundaboutnow
  • Reply 10 of 76
    techconc said:
    This is the type of acquisition that Apple really needs to make.  Apple just doesn't get the gaming market or simply has no interest in it.  Small indie games in Apple Arcade are fine, but Apple's platforms need A list games.  Apple has great hardware with the M1 Max but a poor gaming selection.  Ironically, Mac sales are at record levels now, but gaming on the Mac is worse than any time in history.  Sad.  
    The M1 Max is not "great hardware" for gaming because the GPU only performs between the level of an Nvidia 3060 and 3080, which are available in x86 machines that cost under $1000. Yes Mac sales are at record levels ... but at a market share (depending upon whether you believe Gartner, IDC, Canalys) that 7.5% to 8.6%, making it third in share behind Windows and ChromeOS. 

    The only path into AAA gaming for Apple is to emulate Microsoft and create their own gaming console. The problem: the AAA console gaming market is in turmoil right now, which is precisely what Microsoft is taking advantage of by snapping up beleagured studios left and right. And - as I mentioned above - currently if you combine the efforts of Microsoft, Nvidia, Google and Amazon and you have 42-45 million cloud gaming subscriptions. It would take Apple 3 years at minimum to launch a console gaming platform; who knows how many cloud gaming subscribers there will be in that time. 
    byronlwilliamlondonviclauyycelijahgroundaboutnow
  • Reply 11 of 76
    techconc said:
    This is the type of acquisition that Apple really needs to make.  Apple just doesn't get the gaming market or simply has no interest in it.  Small indie games in Apple Arcade are fine, but Apple's platforms need A list games.  Apple has great hardware with the M1 Max but a poor gaming selection.  Ironically, Mac sales are at record levels now, but gaming on the Mac is worse than any time in history.  Sad.  
    The M1 Max is not "great hardware" for gaming because the GPU only performs between the level of an Nvidia 3060 and 3080, which are available in x86 machines that cost under $1000. Yes Mac sales are at record levels ... but at a market share (depending upon whether you believe Gartner, IDC, Canalys) that 7.5% to 8.6%, making it third in share behind Windows and ChromeOS. 

    The only path into AAA gaming for Apple is to emulate Microsoft and create their own gaming console. The problem: the AAA console gaming market is in turmoil right now, which is precisely what Microsoft is taking advantage of by snapping up beleagured studios left and right. And - as I mentioned above - currently if you combine the efforts of Microsoft, Nvidia, Google and Amazon and you have 42-45 million cloud gaming subscriptions. It would take Apple 3 years at minimum to launch a console gaming platform; who knows how many cloud gaming subscribers there will be in that time. 
    Apple doesn't need its own console.  Nintendo showed some time ago you don't have to have the best hardware or graphics to be successful.  Apple needs to figure out a way to bring some truly great games to the AppleTV and push that capability.  They also would need to market the platform as having that capability.  At this point Apple Arcade is an interesting concept, but I'd say their execution is lacking.  Do the same thing they're trying to do with AppleTV+, go get some content!

    This should have been Apple.  They need to push having a few top games available on iOS, macOS and AppleTV.  They need to push low-cost controller availability, etc.  Make the AppleTV the family gaming platform, one that a lot of people already have in their home. Go for the market the Wii filled, and promote all of your subscriptions at the same time.
    jevichbyronlgenovellewilliamlondonmaximaraBeatsviclauyycelijahg
  • Reply 12 of 76
    MacProMacPro Posts: 19,471member
    red oak said:
    This screams anti-trust if they have any intention of making Call of Duty exclusive to Xbox and PC.    Half of company’s revenue is generated on PlayStation and mobile.I don’t see the point in Microsoft buying it.

    Microsoft has a horrible M&A record.  It is where company’s go to die 
    I don't see the sense in spending that much money and letting it die.  This isn't Ballmer's Microsoft, this is now one of the most successful companies on the planet.  I wish Apple would do something about triple-A games but it seems it never will.  So, I have both a load of Macs and a nice gaming PC.
    edited January 18 byronlbala1234dewme
  • Reply 13 of 76
    YP101YP101 Posts: 139member
    Well, Apple just buy Nintendo will solve the problem. Nintendo gets M1 CPU will resolve the current hardware limitation.
    Apple will receive all retro games on Apple TV.
    byronlblastdoorwilliamlondonBeatsviclauyyc
  • Reply 14 of 76
    rezwitsrezwits Posts: 810member
    YP101 said:
    Well, Apple just buy Nintendo will solve the problem. Nintendo gets M1 CPU will resolve the current hardware limitation.
    Apple will receive all retro games on Apple TV.
    NO!  Apple should buy Sony! LOL

    So, funny tho how Microsoft is such a Gaming Whore Ecosystem.  But that's 99% of what their customers want.
    And I don't care how many people lie to themselves (baby don't look, back baby don't back, or whatever). give me a break!

    It's practically impossible to work 99% FULLY unhindered without aggravating my GUT on a Windows machine...
    Where on macOS it's non-stop keep doing no stopping what I want to do!
    jas99
  • Reply 15 of 76
    byronlbyronl Posts: 230member
    YP101 said:
    Well, Apple just buy Nintendo will solve the problem. Nintendo gets M1 CPU will resolve the current hardware limitation.
    Apple will receive all retro games on Apple TV.
    yea that would be a decent move, mainly for the iconic titles. but i can’t imagine where the switch fits in.
    Beats
  • Reply 16 of 76

    My main concern is future mac support. iOS marketshare is big enough and microsoft doesnt have its own mobile platform, but its not the case with mac and windows/xbox. Historically blizzard has been pretty good with using new technologies like metal, the new M1… and we know how bad Microsofts trackrecord has been when it comes to apps for the mac. They were the last big developer to go native with intel if i remember right…

    The announcemenet of gamepass inclusion is also concerning. Changing playerbase has its own effects on games, not to mention possible forced xbox implementations…

    I really hope they wont ruin a reliable mac developer and some awesome games in the long run. 

    tht
  • Reply 17 of 76
    mpantonempantone Posts: 1,725member
    red oak said:
    This screams anti-trust if they have any intention of making Call of Duty exclusive to Xbox and PC.    Half of company’s revenue is generated on PlayStation and mobile.I don’t see the point in Microsoft buying it.
    Microsoft cannot remove access to existing titles due to contractual obligations. However, future titles could end up being Windows PC & Xbox exclusives. These topics were heavily discussed when Microsoft purchased ZeniMax Media (parent company of Bethesda).

    The main point of Microsoft acquiring large portfolios of popular videogame IP is to increase interest in the Xbox Game Pass and grow the subscriber base. This is actually covered in the AI article. Game Pass is recurring revenue and since you haven't noticed, subscriptions are actually a thing these days.

    So yes, future versions of the Call Of Duty franchise,  Diablo IV and Overwatch 3 may end up being Windows PC/Xbox exclusives.
    edited January 18 tht
  • Reply 18 of 76
    red oak said:
    Microsoft has a horrible M&A record.  It is where company’s go to die 
    Truth.
    Beatsqwerty52
  • Reply 19 of 76
    lkrupp said:
    Maybe the rumors of Microsoft spinning off Office and Windows is more than a rumor.
    Was never a rumor. It was a suggestion made by a third party analyst who claimed "Microsoft should spin off Office and Windows to focus on cloud" when:

    A. Office 365 is their most popular SaaS offering by a mile
    B. though they increasingly heavily use Linux, Windows is one of their most popular IaaS offerings (as well as being a major IaaS product for Google, Amazon and Nvidia to the point that both Amazon Luna and Nvidia GeForce Now use it for video game streaming)

    Yes, Azure is the #2 cloud provider to Amazon AWS, but put Azure in a position to have to pay exhorbitant fees to license Office 365 and Windows like everybody else and what advantage would they have?
  • Reply 20 of 76
    tomahawk said:
    techconc said:
    This is the type of acquisition that Apple really needs to make.  Apple just doesn't get the gaming market or simply has no interest in it.  Small indie games in Apple Arcade are fine, but Apple's platforms need A list games.  Apple has great hardware with the M1 Max but a poor gaming selection.  Ironically, Mac sales are at record levels now, but gaming on the Mac is worse than any time in history.  Sad.  
    The M1 Max is not "great hardware" for gaming because the GPU only performs between the level of an Nvidia 3060 and 3080, which are available in x86 machines that cost under $1000. Yes Mac sales are at record levels ... but at a market share (depending upon whether you believe Gartner, IDC, Canalys) that 7.5% to 8.6%, making it third in share behind Windows and ChromeOS. 

    The only path into AAA gaming for Apple is to emulate Microsoft and create their own gaming console. The problem: the AAA console gaming market is in turmoil right now, which is precisely what Microsoft is taking advantage of by snapping up beleagured studios left and right. And - as I mentioned above - currently if you combine the efforts of Microsoft, Nvidia, Google and Amazon and you have 42-45 million cloud gaming subscriptions. It would take Apple 3 years at minimum to launch a console gaming platform; who knows how many cloud gaming subscribers there will be in that time. 
    Apple doesn't need its own console.  Nintendo showed some time ago you don't have to have the best hardware or graphics to be successful.  Apple needs to figure out a way to bring some truly great games to the AppleTV and push that capability.  They also would need to market the platform as having that capability.  At this point Apple Arcade is an interesting concept, but I'd say their execution is lacking.  Do the same thing they're trying to do with AppleTV+, go get some content!

    This should have been Apple.  They need to push having a few top games available on iOS, macOS and AppleTV.  They need to push low-cost controller availability, etc.  Make the AppleTV the family gaming platform, one that a lot of people already have in their home. Go for the market the Wii filled, and promote all of your subscriptions at the same time.
    You state "Apple doesn't need its own console" and then you cite Nintendo ... which has its own console. The Nintendo Switch is a hybrid of two of the most popular console gaming hardware platforms of all time: the Wii and the DS. Without the massive success of the Wii and the operating system from the 3DS, the Switch wouldn't have had a chance. Nintendo also has what Apple does not have, which is an extensive list of their own gaming IP - Breath of the Wild was a launch title, plus Super Mario Odyssey, Smash Bros Ultimate, Animal Crossing and the venerable Mario Kart were key to its success - and a longrunning relationship with gaming studios. Apple has none of those things. 

    Incidentally, you greatly overstate the number of Apple TV boxes in the wild. Apple TV is behind Roku, Tizen, Fire TV, lgOS and Android TV/Google TV and it isn't close. If it were, you would have more developers for Apple Arcade. The reason why Apple Arcade didn't take off is because it is between a rock and a hard place. Apple wants the combination of iPhone, iPad and Apple TV to push at least PS4-caliber games. (Whether the Apple TV is even capable of 4K games at high refresh rates is debatable. It is likely capable of either 1080p games at high refresh rates or 4K games at low ones.)
    Two problems.
    1. There is no evidence that AAA gamers want PS4-caliber games. They want the latest games running at the most powerful specs, which means 8K with ray tracing etc.
    2. iPad/iPhone gaming is primarily touchscreen. Apple TV requires controllers. The largest audience of gamers - by far - is iPad but the AAA gaming experience requires targeting the device with a very small market share (Apple TV) with the ideal version of the game while still making the iPad and iPhone versions high quality. That is a challenge that AAA developers for no other platform but Nintendo have to worry about, and again Nintendo's partners have been developing games for the DS and Gameboy for decades. 

    And for the reasons that I have stated, no this shouldn't be Apple. Apple doesn't have a platform capable of running Activision Blizzard games. Microsoft has two of them: Windows and PlayStation. And no, buying Activision Blizzard won't cause a stampede of people to run out and buy MacBook Airs or Apple TVs to game on because that is still just one content library from one studio. It would be the equivalent of - for example - Amazon trying to build a streaming service with only the MGM library. 
    williamlondonviclauyycroundaboutnow
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