In a major development in the gaming industry, the European Union has cleared the $69 billion deal between tech giant Microsoft and gaming company Activision Blizzard. The deal, which was announced on May 15, 2022, will see Microsoft acquire Activision Blizzard, one of the world’s largest video game publishers. This acquisition is expected to shake up the gaming industry and transform the landscape of online gaming. In this article, we’ll take a closer look at the Microsoft-Activision deal, the history of Microsoft games and Activision Blizzard, antitrust concerns surrounding the deal, analysis of the $69 billion deal, impact on Activision Blizzard stock (ATVI) and Microsoft stock (MSFT), future plans for the gaming giants, Xbox and Activision: What to expect, industry reactions to the deal, and frequently asked questions about the Microsoft-Activision deal.
The history of Microsoft games and Activision Blizzard
Microsoft has a long history in the gaming industry. The company first entered the gaming market in 2001 with the launch of the original Xbox console. Since then, Microsoft has released several iterations of the Xbox, including the Xbox 360 and the Xbox One. In addition to its hardware, Microsoft has also developed and published several popular video game franchises, such as the Halo series, Gears of War, and Forza.
Activision Blizzard, on the other hand, was formed in 2008 through the merger of Activision and Vivendi Games. The company is one of the largest video game publishers in the world, with a portfolio of popular franchises such as Call of Duty, World of Warcraft, and Candy Crush. In recent years, Activision Blizzard has faced criticism from its employees and players over issues such as workplace culture and diversity.
Antitrust concerns surrounding the deal
The Microsoft-Activision deal has raised antitrust concerns among industry experts and regulators. The acquisition will give Microsoft control over several popular gaming franchises, including Call of Duty, World of Warcraft, and Candy Crush. This could potentially limit competition in the gaming industry and give Microsoft an unfair advantage over other companies.
However, Microsoft has argued that the acquisition will not harm competition, as the gaming industry is highly competitive and there are several other companies that offer similar products and services. The European Union has cleared the deal, but regulators in other regions, such as the United States, are still reviewing the acquisition.
Analysis of the $69 billion deal
The $69 billion deal between Microsoft and Activision Blizzard is one of the largest acquisitions in the history of the gaming industry. The deal will see Microsoft acquire all of Activision Blizzard’s outstanding shares for $95 each in cash. This represents a premium of over 45% on Activision Blizzard’s closing stock price on May 14, 2022.
The acquisition is expected to significantly increase Microsoft’s presence in the gaming industry. With the addition of Activision Blizzard’s popular franchises, Microsoft will be able to offer a more diverse range of games to its customers. The deal will also give Microsoft access to Activision Blizzard’s extensive network of developers and studios.
Impact on Activision Blizzard stock (ATVI) and Microsoft stock (MSFT)
The announcement of the Microsoft-Activision deal had an immediate impact on the stock prices of both companies. Activision Blizzard’s stock price surged by over 35% following the announcement, while Microsoft’s stock price fell slightly.
The acquisition is expected to have a significant impact on both companies’ financial performance in the long term. Activision Blizzard’s revenue and earnings are expected to increase as a result of the deal, while Microsoft’s earnings are expected to be boosted by the addition of Activision Blizzard’s popular franchises.
Future plans for the gaming giants
Following the acquisition, Microsoft has announced that it plans to integrate Activision Blizzard’s games and studios into its Xbox Game Studios division. This will give Microsoft control over several popular gaming franchises, including Call of Duty, World of Warcraft, and Candy Crush.
Microsoft has also announced that it plans to invest heavily in the development of new gaming content. The company has stated that it will double the size of its gaming studios over the next few years, which will enable it to produce more high-quality games for its customers.
Xbox and Activision: What to expect
The Microsoft-Activision deal is expected to have a significant impact on the Xbox gaming platform. With the addition of Activision Blizzard’s popular franchises, Xbox will be able to offer a more diverse range of games to its customers. This is expected to increase the popularity of the Xbox platform and help Microsoft compete more effectively with other gaming platforms such as PlayStation and Nintendo.
In addition to its impact on the Xbox platform, the Microsoft-Activision deal is also expected to transform the landscape of online gaming. With control over several popular gaming franchises, Microsoft will be able to shape the direction of the gaming industry and influence the development of new gaming technologies.
Industry reactions to the deal
The Microsoft-Activision deal has received mixed reactions from industry experts and stakeholders. Some have praised the deal as a strategic move that will enable Microsoft to compete more effectively in the gaming industry. Others have raised concerns about the potential impact of the acquisition on competition in the gaming industry and the creative freedom of game developers.
The deal has also sparked controversy among Activision Blizzard’s employees and players. Some employees have criticized the acquisition as a betrayal of the company’s values and a threat to the creative freedom of game developers. Some players have also expressed concern that the acquisition could lead to a decline in the quality of Activision Blizzard’s games.
Frequently asked questions about the Microsoft-Activision deal
- Did Microsoft buy Activision Blizzard? Yes, Microsoft has acquired Activision Blizzard for $69 billion.
- What will happen to Activision Blizzard’s popular franchises? Following the acquisition, Activision Blizzard’s popular franchises will be integrated into Microsoft’s Xbox Game Studios division.
- Will the acquisition harm competition in the gaming industry? The acquisition has raised antitrust concerns among industry experts and regulators, but Microsoft has argued that it will not harm competition.
The Microsoft-Activision deal is a major development in the gaming industry that has the potential to transform the landscape of online gaming. The acquisition will give Microsoft control over several popular gaming franchises, including Call of Duty, World of Warcraft, and Candy Crush. While the deal has raised concerns about the potential impact on competition and the creative freedom of game developers, it is also expected to enable Microsoft to compete more effectively in the gaming industry and shape the direction of the industry. As the gaming industry continues to evolve, it will be interesting to see how the Microsoft-Activision deal plays out and what the future holds for the gaming giants.