American tech giant, Microsoft Corporation, is reportedly buying leading video game company, Activision Blizzard, known for its mega franchises such as Call of Duty, Candy Crush, and World of Warcraft, for $70 billion, making it the biggest acquisition deal ever in the tech and gaming industry.
Microsoft stated that the all-cash $68.7 billion deal will lay the foundation for the metaverse, becoming the firm’s biggest deal, a title previously held by its 2016 acquisition of LinkedIn for $26 billion.
The takeover is also the biggest in the tech sector’s history, surpassing Dell’s $67 billion deal for buying EMC in 2015.
The takeover would see Microsoft becoming the world’s third-biggest company in terms of revenue, with China’s Tencent in the lead followed by Japan’s Sony, owner of the video game brand PlayStation.
Satya Nadella, Chairman and CEO of Microsoft, stated that the gaming industry will play a major role in developing metaverse platforms, adding that by investing in world-class content, community, and cloud, the company will be starting a new era where players and creators are put first and make gaming safe, inclusive and accessible.
Microsoft claimed that an important factor of the deal was Activision Blizzard’s strength in the fast-growing mobile gaming sector.
Bobby Kotick, CEO of Activision Blizzard, will continue running the gaming business, which, post-merger, will be managing 30 internal game-developing studios under it.
The deal comes as a relief for Activision Blizzard, which has been facing a series of allegations regarding sexual misconduct and discrimination despite having fired more than three dozen employees since July last year while disciplining 40 others involved.
Wedbush Securities tech and media analyst, Daniel Ives, stated that while the deal will naturally draw regulators’ attention, Microsoft will eventually get clearance as it is not under the scrutiny and pressure like its Silicon Valley rivals.
Ives added that the deal will further enhance Microsoft’s consumer strategy, kickstarting its broader gaming efforts to venture into the metaverse, while calling the acquisition of Activision Blizzard as a unique asset for the firm.