Microsoft set to purchase Activision Blizzard in $68.7 billion deal

Microsoft announced this morning that it will purchase gaming giant Activision Blizzard for a record breaking $68.7 billion. The move would bring Call of Duty and many other games under the umbrella of the Xbox maker.

15 months ago, Microsoft's acquisition of Bethesda was announced. After some initial confusion about what that meant, it has become clear that most of the Elder Scrolls games will not be on the PS5 or any other console.

The same could happen for the big games from the company. The Game Pass program has 25 million subscribers, and Microsoft notes that the games will become part of it. The company said that the acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Microsoft will have 30 internal game development studios by the end of the year.

Microsoft has a new way in to the massive mobile gaming market with the acquisition of King. Microsoft said in a statement that it will empower players to enjoy the most-immersive franchises, like Halo and Warcraft, virtually anywhere they want.

It's similar to what Take-Two said about its recent acquisition of the mobile gaming powerhouse. Take-Two has an extensive catalog of commercially and critically successful console and PC titles with engaged and loyal communities of players, and there is a meaningful opportunity to create mobile games and new cross- platform experiences for many of these properties.

Do you want to buy the dip?

The closing stock price of $65.39 was a significant premium to the all-cash transaction value of $95 a share. The stock price hit a peak in February, but has since fallen.


The stock decline is a reflection of the controversy surrounding the company after the state of California brought a lawsuit against it. Bobby Kotick has come under fire after it was reported that he hid information from the board of directors.

Microsoft said in a statement today that Bobby Kotick will continue to serve as CEO of the company, and he and his team will continue to drive efforts to further strengthen the company's culture and accelerate business growth. Phil Spencer, CEO, Microsoft gaming, will be reporting to the business once the deal closes.

A group of workers at the publisher's software subsidiary are on strike in protest of the treatment of their testers.

All three major console makers have made vague statements of concern about the allegations surrounding the company. In November, Phil Spencer, Microsoft's president, told his employees that the company was making adjustments to its relationship with the company. This type of behavior is not accepted in our industry.

Spencer was quoted in The New York Times last week as saying that the company has changed how they do certain things. Spencer said he would rather help other companies than try to get into punishing and that it was not his position to judge who the CEOs are at other companies.


"If I can learn from them or help with the journey that we've been on on Xbox, I'd much rather do that than get into any kind of finger wagging."

"Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players," Spencer said in a statement accompanying today's announcement. We value individual studio cultures. Creative success and autonomy go hand-in-hand with treating every person with dignity and respect. All teams and leaders are held to this commitment. We are looking forward to extending our culture of proactive inclusion to the great teams.

Not a done deal.

The boards of both Microsoft and Activision have approved the deal, but it is still subject to customary closing conditions and regulatory review, as Microsoft puts it. The Federal Trade Commission could raise antitrust concerns over the proposed merger because of the sheer size. In an investor call Tuesday morning, Microsoft said that the merger would make it the No. 3 gaming company worldwide by revenue.

The deal is not expected to close until Microsoft's fiscal year starts in July. The two companies will be separate until then.

As developments warrant, this is a breaking story that will be updated.