Microsoft is buying Activision Blizzard for nearly $70 billion to boost its mobile gaming and virtual-reality technology competitiveness. The all-cash $68.7 billion deal will make Microsoft one of the world’s largest video game companies.
Microsoft CEO Satya Nadella and his team will maintain their focus on driving efforts to strengthen its culture and business growth further, Nadella said.
Shares of Microsoft slid about 2%. Last year, the company spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, behind popular video games The Elder Scrolls, Doom, and Fallout.
Microsoft has acquired Swedish game studio Mojang for $2.5 billion to improve its Xbox Game Pass game subscription service and metaverse ambitions.
Wedbush Securities analyst Daniel Ives believes that the acquisition of Mojang by Microsoft is an aggressive move on the company’s part. It will help them surpass Nintendo in global revenue for video game companies. Sony, which manufactures the Playstation console, remains first while Chinese tech giant Tencent holds second.
Activision Blizzard’s planned acquisition of King Digital Entertainment, the maker of Candy Crush, will likely put Microsoft into antitrust regulators’ sights, too, according to Wedbush Securities analyst Michael Ives.
Nuance, the speech recognition company Microsoft plans to acquire for $16 billion, is already facing delays due to an antitrust investigation by British regulators. Microsoft’s success as a cloud computing provider has allowed it to make such a big all-cash purchase of Activision.
Nadella’s failed 2020 attempt to acquire social media platform TikTok may have “Really whet the appetite” for significant consumer acquisition, according to Ives. If Microsoft wants to bet on the ‘metaverse,’ it should invest in new technology, not purchase a competitor.
