19 Jan 2022

By: Sport Industry Group

Information technology giant Microsoft has struck a $68.7bn (£50.5bn) all-cash deal to acquire esports organisation Activision Blizzard.

The takeover will give Microsoft control of an organisation that owns various esports enterprises, competitions and franchises, including Overwatch, Call of Duty, Warcraft, Major League Gaming, the Overwatch League and the Call of Duty League.

Activision Blizzard has nearly 400m active monthly players of its games across 190 countries.

Following the $95-per-share acquisition – which represents a premium of nearly 50% on the gaming company’s share price on the Nasdaq stock exchange and is by far the most expensive takeover in the history of gaming – Bobby Kotick is set to continue to serve as Activision Blizzard CEO.

The transaction is expected to close in the 2023 fiscal year following regulatory and shareholder approval, with the business ultimately being integrated into the Microsoft Gaming division, which is led by Chief Executive Phil Spencer.

“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” Spencer said. “Together, we will build a future where people can play the games they want, virtually anywhere they want.”

Microsoft, which owns the Xbox gaming brand, said that it will be the third-largest gaming company worldwide by revenue following the deal, behind Tencent and Sony.

Microsoft’s Chairman and Chief Executive, Satya Nadella, added, “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.

“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.”

In spite of its undoubted commercial success, Activision Blizzard has arguably endured the most challenging year so far.

The company has been the subject of a series of adverse headlines in recent months regarding the culture of the workplace, with allegations of corporate misconduct and sexual harassment emerging. Since July 2021, dozens of its staff have been fired or reprimanded.

Focusing on the takeover, Kotick said, “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.”

Image credit: Dinosaur918 - CC BY-SA 3.0 - edited for size