Today’s breaking news that Microsoft are set to acquire Activision-Blizzard- (ABK) in a deal worth close to $70bn has sent shockwaves through the world of gaming, and the effect it has had on shares of the beleaguered Call of Duty publisher has been dramatic. Following the announcement of the potential deal, Activision have seen their shares jump an incredible 36%, with the move set to revitalise a sector that has come under considerable pressure in recent months.
The deal is the largest acquisition Microsoft has ever made, and the largest in tech history, dwarfing the $26.2bn paid for Linkedin by the company. In comparison to their acquisition of Mojang, which cost them $2.5bn, it is an incredible amount, although the deal does also include ownership not just of Activision and World of Warcraft publishers Blizzard, but also the hugely profitable mobile game developers King.
The deal, which sees Microsoft pay $95 per share to acquire ABK for $68.7bn saw Activision’s shares rise 36% in pre-market, which represents a significant rally from the low points around december 1st that saw the company’s shares drop to around $57. Those valuations followed a spate of revelations concerning an abusive culture at both Activision and Blizzard, many of which are still not resolved, as well as investigations by labour regulators into conduct at the publishing giants.
ABK join Bethesda, Mojang at Microsoft
The impact of today’s acquisition news was so great that other game companies have seen a price surge as a result, with the likes of EA, Projekt Red, Ubisoft and Roblox all seeing hikes in share value. This may be a result of speculation about future acquisitions, although any more deals of this size from Microsoft will surely result in questions being asked about the monopolisation of the sector, given the incredible number of creative firms under their umbrella.
ABK will join a stable that already includes Skyrim makers Bethesda, Doom publishers ID Games and many others, with the likes of Rare, 343 industries, Treyarch and the aforementioned Mojang just some of the names. It makes Microsoft the third biggest games company in the world, behind only League of Legends publisher Tencent, who owned a 5% stake in ABK prior to this deal, and media giant Sony.
Back in November Microsoft VP of Gaming Phil Spencer told the press his company were “evaluating all aspects of our relationship with Activision Blizzard '' and were “deeply troubled by the horrific events and actions” that had been unveiled regarding corporate culture and conduct at the company. We may never see a true resolution to that case now, with Microsoft set to take control of the company, although it is far from a sure thing that the deal will be the end of ABK’s legal issues.