Microsoft has announced that they are planning to purchase Activision Blizzard in an all-cash deal worth almost $69 Billion.
- Bobby Kotick will remain CEO of Activision Blizzard and will report to Phil Spencer, CEO of Microsoft Gaming.
- The move will make Microsoft the world's third largest gaming company.
- Microsoft plans to launch Activision Blizzard games into their Game Pass offering.
Quote From Microsoft
REDMOND, Wash. and Santa Monica, Calif. – Jan. 18, 2022 – With three billion people actively playing games today, and fueled by a new generation steeped in the joys of interactive entertainment, gaming is now the largest and fastest-growing form of entertainment. Today, Microsoft Corp. (Nasdaq: MSFT) announced plans to acquire Activision Blizzard Inc. (Nasdaq: ATVI), a leader in game development and interactive entertainment content publisher. This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse.
Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash. When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. The planned acquisition includes iconic franchises from the Activision, Blizzard and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming. The company has studios around the word with nearly 10,000 employees.
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.
“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 is the largest segment in gaming, with nearly 95% of all players globally enjoying games on mobile. Through great teams and great technology, Microsoft and Activision Blizzard will empower players to enjoy the most-immersive franchises, like “Halo” and “Warcraft,” virtually anywhere they want. And with games like “Candy Crush,” Activision Blizzard´s mobile business represents a significant presence and opportunity for Microsoft in this fast-growing segment.
The acquisition also bolsters Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million subscribers. With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.
The transaction is subject to customary closing conditions and completion of regulatory review and Activision Blizzard’s shareholder approval. The deal is expected to close in fiscal year 2023 and will be accretive to non-GAAP earnings per share upon close. The transaction has been approved by the boards of directors of both Microsoft and Activision Blizzard.
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.
Microsoft Chairman and CEO Satya Nadella; Bobby Kotick, CEO, Activision Blizzard; CEO, Microsoft Gaming, Phil Spencer; and Microsoft Chief Financial Officer Amy Hood will host a webcast for investors and media on Jan. 18, 2022, at 6 a.m. Pacific time/9 a.m. Eastern time regarding this transaction.
- S.: (877) 407-0666(no password required)
- International: +1-201-689-8023(no password required)
- Webcast: https://aka.ms/MS-Investor-Call
There will be a recording of the conference call available shortly after the call until Friday, Jan. 28, 2022, at 5 p.m. Pacific time. To access that recording:
- S.: (877) 660-6853
- International: +1 (201) 612-7415
- Conference ID: 13726291
For more information, please visit the blog post from Phil Spencer, CEO, Microsoft Gaming. Related imagery is also available. For broadcast quality b-roll and audio, please contact [email protected]
Fast facts on gaming
- The $200+ billion gaming industry is the largest and fastest-growing form of entertainment.
- In 2021 alone, the total number of video game releases was up 64% compared to 2020 and 51% of players in the U.S. reported spending more than 7 hours per week playing across console, PC and mobile.
- 3 billion people globally play games today, which we expect to grow to 4.5 billion by 2030.
- More than 100 million gamers, including over 25 million Xbox Game Pass members, play Xbox games across console, PC, mobile phones and tablets each month.
Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.
About Activision Blizzard
Our mission, to connect and engage the world through epic entertainment has never been more important. Through communities rooted in our video game franchises we enable hundreds of millions of people to experience joy, thrill and achievement. We enable social connections through the lens of fun, and we foster purpose and meaning through competitive gaming. Video games, unlike any other social or entertainment media, have the ability to break down barriers that can inhibit tolerance and understanding. Celebrating differences is at the core of our culture and ensures we can create games for players of diverse backgrounds in the 190 countries our games are played.
As a member of the Fortune 500 and as a component company of the S&P 500, we have an extraordinary track record of delivering superior shareholder returns for over 30 years. Our sustained success has enabled the company to support corporate social responsibility initiatives that are directly tied to our franchises. As an example, our Call of Duty Endowment has helped find employment for over 90,000 veterans.
Learn more information about Activision Blizzard and how we connect and engage the world through epic entertainment on the company´s website, www.activisionblizzard.com
INB4 WoW comes to Game Pass?
I never knew I would say it - I am glad that Microsoft bought Blizzard and Activision.
They were doing good job with those companies that they bought.
Also it looks like working environment in Microsoft is much better than in AB, at least this is what looks like and what I heard from people working at Microsoft (not on games department, but still you can have hopes company policies are similar everywhere).
AWESOME NEWS. This will be a good thing for Blizzard as a whole, not only for Hearthstone. Lots of people will get fired though. Blizzard needs a BIG cleanup and increase delivery time A LOT. It's incredible how slow they are. Many people putting stones on the wheel and pretending that they are working.
For example, Overwatch "2" isn't even a sequel, it's an expansion (let's be honest). It was announced on 2019, but probably development started some time before. An expansion like that should take 2 to 3 years for a company as big as Blizz. And all points out to it being delayed AGAIN another year. If 'd be on charge I'd do a serious cleanup on the teams. Probably the problem is that they have lots of unneeded bosses and subdivisions that slow things up a lot, with people from the business taking decisions based on "I personally think" other than on data, facts and value focus.
I honestly still don't get why people think that OW2 is just an expansion. New heroes/maps, new Visuals, new Story, big engine upgrades, a bunch of pvp reworks (5v5, role passives, tanks into bruisers, complete hero reworks like Bastion, light reworks like Reinhard, general reduction of cc etc.), a bunch of indivitual hero reworks and a big pve campaign + random pve levels on top of that. What more does it need in order to be a "real" sequel?
Jumping from one frying pan to another. The only difference here is being flamed by a different corporate entity.
Looking at the latest microsoft made release, halo infinite, Im not optimistic. There's no guarantee that this acquisition would suddenly push blizz out from that creative quagmire that they are currently drowning in. Nor would it signal a return to better days when games are created and released when ready, or represent bold new directions in the industry. If we're lucky blizzard would actually still be here in the next 10 years, and we don't find ourselves opening up battlenet with an xbox logo on it.
The only good thing coming out of this is B Kotick would probably finally be excised from the company, to allow another sort of tick to suck blood off this corpse that used to be blizzard entertainment.
I read somewhere that it can be expected once this all settled down, he will leave. Seems like a decent way out for him, without being fired and all. Stockholders will be happy anyway with this deal.
So I think this will be good in the long run. We just miss out on the sweet firing of Kotick.
69B cash ????
Apple and Microsoft hav billions in cash so might as well use it! They usually buy stuff with cash when doing acquisitions.
everyone talking about how things might get better from the microsoft purchase obviously does not remember the activision blizzard merger literally spelling the beginning of the end for the entire company as a respectable entity
Microsoft has been doing good in the past 5-7 years with their acquisitions. I see this as being a huge positive and once Kotick gets the boot (rumored he is leaving after ATVI is acquired) that should really pave the way for a strong path forward.
Kotick getting the boot doesn't automatically mean any actual change will happen though. At the end of the day, there's still gonna be a group of stockholders pushing for more greedy business practices without a care for the actual state of the games being made or the employees working on them and I'd wager the stockholders at Microsoft will be willing to push even harder for those things. I hope I'm wrong though, I just don't see Microsoft getting another 5 companies under their monopoly ever being a good thing for consumers.
It pretty much can only get better for Blizzard under Microsoft ownership, so this might be a good thing. On the other hand I don't expect any changes, as Activision Microsoft will aways put the dollar first and the player second (though they are a bit better with communications).
BTW: For Kotick this likely involves a huge payday (even for his standards). So mission accomplished for him I guess.
Someone of Kotick's caliber isn't looking for a payday. He's looking to do stuff, otherwise, I'm sure he could retire ages ago and do whatever.
He doesn't need more money, but that doesn't mean he doesn't want more money.
I'm surprised Bobby Kotick is staying; this seems like such a good moment to let him leave.
I'm not surprised at all. Microsoft has no incentive to get rid of him right away. Post-acquisition integration is a tricky thing and replacing management as first thing usually does not help. In the medium term he might have a harder time sticking to his job though, but then the dust might have already settled.
He'll almost certainly stay on for a transitional period and then be let go, or leave to "hang with the family". I don't think they'd keep him around after another bad news cycle. Can't hurt that Game Pass brand!
Well if he screws up after purchase he won't get out of it anymore, but for now they can't really touch him... Purchase is not finalized yet afterall
I'm hoping they will after the deal is trough. Even then, these kind of people have some sort of clause that allows them a fat paycheck if fired, so it won't hurt him that much.