Microsoft confirmed that it is buying Activision Blizzard for $68.7 billion. The move will cause ripples throughout the entire gaming industry, as Activision Blizzard is one of the largest gaming companies in the world. Microsoft detailed that it plans to launch Activision Blizzard games onto Xbox Game Pass, which will greatly expand the company's gaming subscription service. After the deal is finalized, Microsoft will have 30 internal game development studios and be one of the largest gaming companies on earth.
The benefits to Microsoft of such a deal are obvious. Activision Blizzard is a massive gaming company that makes Call of Duty, Warcraft, Candy Crush, Diablo, Overwatch, Spyro, Hearthstone, Guitar Hero, Crash Bandicoot, StarCraft, and many other big-name games. Having these games on Xbox Game Pass should help Microsoft push the streaming service to new heights. Microsoft will also be able to shape the franchises in a direction that it likes, which may help recover some struggling properties.
Of course, Microsoft will also be able to ensure that any Activision Blizzard games are available on Xbox consoles and Windows PCs.
Microsoft's longstanding IP, the company's purchase of ZeniMax in 2020, and the recently announced acquisition of Activision Blizzard push Microsoft even further into the upper echelon of gaming. Once the purchase of Activision Blizzard is complete, Microsoft will be the third-largest gaming company by revenue, only trailing Tencent and Sony.
While the move has clear benefits for Microsoft, some have already expressed concern that the sale of Activision Blizzard marches the gaming world toward a small handful of corporations controlling the industry. Tencent, Sony, and Microsoft would control the lion's share of the most popular games, which comes with risks.
Others note that while the industry is consolidated, there are enough big players to balance each other out.
Another factor in the newly announced deal is that Activision Blizzard is under heavy scrutiny for allegations of fostering a sexist workplace environment and allowing abusive behaviors to go without punishment. Hundreds of Activision Blizzard employees signed a petition to remove the company's CEO Bobby Kotick.
With Activision Blizzard facing a lawsuit and criticism, new leadership could help the company regain its direction. Microsoft specified that Bobby Kotick will remain the CEO of Activision Blizzard, but after the deal is finalized, Activision Blizzard will report to Phil Spencer.
Only a few months ago, Spencer was said to be reevaluating Microsoft's relationship with Activision Blizzard. Given today's announcement, it's safe to say the relationship was indeed reevaluated.
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