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.
Advisors
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.Webcast details
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.
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About Microsoft
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
Comments
The term is referred to as the "golden parachute". In acquisitions, leadership usually stays around for roughly a year to maintain the infrastructure. I don't expect him to stay on permanently. And if he leaves he'll get a huge severance.
Also CEO's almost never get fired. The board usually approaches them, asks them to leave, and pays them off. It's bad publicity for a company if they have to outright fire a C-level person, because it usually indicates hostility, undermining, and even ignorance on the board level for getting to that point.
Honestly, it's probably fine. Microsoft doesn't make particularly worse/better content than ActiBlizz, other than remaking the same Halo game for 20 years. Bringing things like Warcraft and other Blizzard IP into the Games pass means I might actually play them.
Master Chief in Mercenaries when?
The question is, will he be classified as a human or a demon?
Well since Blizzard was incapable of managing it's own games, letting WoW, Diablo, Overwatch and HotS decay like they have, perhaps this is a change that will offer some improvement to us the players.
However the fact they mentioned mobile specifically makes me slightly worried. Because, do you guys not have phones?
Well, I have an old-school flip phone with online capabilities that would have made us cringe in the '90s. So for this context no, I don't have a phone :P
i whish flip phones would come back. i cool it is to end a call by just folding the phone back?
They are back, see the Galaxy Fol
or the motorola one
product wise i dont think they will mess with the devs. i mean they will even keep Blizzard CEO. they just want the IP and the sound of money.
however if they see a certain game isnt performing how they want they might either tell the devs to improve the financial aspect AKA increase the p2w aspect or axe the game development
$69 Billion.
Nice.
Now that's potentially bad news for The Elder Scrolls: Legend, owned by Bethesda who was also purchased by Micro$oft last year.
The game is not developed any more but still has a very good following (and arguably a stale yet nicer meta than Hearthstone ever had)
*Vomit*
Heavy breathing. Ok, now let's actually read through it.
"Together we will build a future where people can play the games they want, virtually anywhere they want."
As long as they are exclusively using the latest Microsoft operating systems and consoles.
*More vomit*
I agree. Microsoft bought Bethesda and now any future T:ES games will no loner be on Playstation. This is great for PC players and Xbox players, but for Playstation players they just lost a lot of future games.
It's not even great for PC players. If a platform owner is at the same time the driving force behind game development, it's pretty much always bad for the consumer because it's in the interest of the platform owner to push their platform every chance they get. The Age of Empires remasters have been a perfect example. They could have pushed those out on so many available Windows platforms. Nope, Win 10 only. You can expect the same treatment for everything that will come out of Blizzard moving forward. It won't be long until they say fuck Windows 10, time to push for people to migrate to Windows 11. As soon as they can get away with cutting off support for older platforms, they will. And nobody can say shit to them because people aren't suddenly start abandoning Windows altogether en masse for other OS. Microsoft has monopoly and that allows them the luxury of impunity.
Well, you can say the same about Sony with their exclusives, now Microsoft wants to compete much harder than in the previous years