Microsoft announced plans Tuesday to acquire video game company Activision Blizzard in a $68.7 billion all-cash deal, making the tech giant the world’s third-largest gaming company by revenue.
Pending regulatory approvals, Activision Blizzard’s “Call of Duty” and “World of Warcraft” games, among other big titles, will add to Microsoft’s expanding gaming portfolio, which includes Xbox consoles and games like “Minecraft” and “Doom.”
Microsoft, which has a market cap of $2.3 trillion, is swooping in amid Activision Blizzard’s recent legal hurdles, including an SEC investigation.
- In September, Activision agreed to pay $18 million as part of a lawsuit settlement with the Equal Employment Opportunity Commission over allegations of gender-based harassment.
- In November, a Wall Street Journal report claimed CEO Bobby Kotick knew of sexual misconduct allegations in the workplace.
- On Monday, the Wall Street Journal reported that Activision disciplined or pushed out more than 80 employees in relation to the situation since July.
Activision Blizzard’s third-quarter revenue jumped 5.9% year-over-year to $2.07 billion. The company’s shares rose almost 38% in premarket trading on Tuesday.
More Gaming Plans
Microsoft said it plans to bring Activision games into its Xbox Game Pass subscription service, which has 25 million subscribers — up 7 million from the start of 2021. Microsoft said the combined entity would have 30 internal game development studies.
As part of the announcement, Phil Spencer was promoted from head of Xbox to CEO of Microsoft Gaming. Kotick will remain Activision’s CEO.
The deal is expected to close by July 2023.