Microsoft is buying Activision Blizzard for $68.7 billion

Microsoft just made one of the largest-ever bids for a game studio. The company has announced plans to acquire Activision Blizzard for $95 per share, valuing the all-cash deal at an enormous $68.7 billion. The deal would make the combined entity the “third-largest” game company by revenue, according to Microsoft, and would put titles like Call of Duty, World of Warcraft and Candy Crush under the company's wing. Microsoft plans to add Activision Blizzard games to Game Pass as part of the deal.

Mobile gaming is also a significant factor in the acquisition, Microsoft said. On top of folding King's phone games into Microsoft's business, the purchase promises to bring franchises like Halo and Warcraft to more devices.

The buyout is expected to close sometime in Microsoft's fiscal 2023 (no later than June 2023) if regulators and Activision Blizzard shareholders greenlight the move. The boards of directors for both companies have already approved the deal.

While news of the acquisition comes as Activision Blizzard is still embroiled in a misconduct scandal, you shouldn't expect significant leadership changes. Bobby Kotick will remain Activision Blizzard's CEO despite calls for his resignation, and will now report to Microsoft Gaming chief Phil Spencer. In a company letter, Kotick described Microsoft's move as a chance to “further strengthen” Activision Blizzard's workplace culture and “set a new standard” for inclusiveness. He didn't outline specific plans for reform, but did say there would be “minimal changes” to staff counts after the union was complete.

If it moves forward, the merger would help Microsoft compete with heavyweights Tencent and Sony, which have both been on buying sprees in recent months. Kotick also saw this helping his company better compete as metaverse gaming rises to prominence. In that light, this may be as much a matter of future-proofing the company as anything else.

Some major questions remain, though. Microsoft didn't say how many Activision Blizzard games would be Xbox-exclusive on consoles, or Windows-exclusive on computers. It's also unclear how much Microsoft might influence development of key franchises. It's not certain Microsoft will lock Call of Duty or other giant games to the Xbox in the near future, though — PlayStation sales represent a large chunk of Activision Blizzard's revenue, and dropping that platform would significantly reduce the company's clout in the games industry.