Microsoft plans to buy ‘World of Warcraft’ maker Activision Blizzard in a $69 billion metaverse bet. The legendary game maker is becoming infamous for its treatment of women.
Microsoft will pay $95 a share in cash, making it the most significant purchase ever.
Microsoft to buy Activision Blizzard, making it the world’s third-biggest gaming company
Microsoft and Activision are two enormous gaming forces. As Microsoft plans to buy Activision Blizzard, their union will create the world’s third-biggest gaming company.
Activision aims to support Microsoft in better competing with rival Sony Corp.’s Playstation. The Call of Duty maker has a long relationship with Microsoft’s Xbox due to their online platform Xbox Live making the game a worldwide success.
The online platform Xbox Live allows players to connect for multiplayer matches globally. Also, many Activision games are compatible with Xbox consoles.
Microsoft Chairman and CEO Satya Nadella said, “Gaming has been key to Microsoft since our earliest days as a company. Today, it’s the largest and fastest-growing form of entertainment, and as the digital and physical worlds come together, it will play a critical role in the development of metaverse platforms.”
Why is Microsoft acquiring Activision Blizzard?
Last year Activision Blizzard shares crossed more than $100 apiece in February. Followed by a sexual lawsuit filed by a California state agency in July. The case led the company to lose more than half of its shares by the end of last year.
In the Wall Street Journal, Activision CEO Bobby Kotick links to reports of mistreatment of women. The reports suggest that Kotick was aware of sexual misconduct, including rape which the company did not report to the board.
In light of continuous allegations and lawsuits, Kotick is under pressure from employees to resign. In the wake of the Wall Street Journal report, CEO of Microsoft Gaming, Phil Spencer said, they are making “proactive adjustments.”
They are in the process of reevaluating their relationship with Activision; as Nadella said to investors in a call, “We also recognize that after the close, we will have significant work to do in order to continue to build a culture where everyone can do their best work.”
Wedbush Securities analyst Dan Ives said, “With Activision’s stock under heavy pressure (CEO related issues/overhang) over the last few months, Microsoft viewed this as the window of opportunity to acquire a unique asset that can propel its consumer strategy forward.”
“Acquiring Activision will help jump-start Microsoft’s broader gaming endeavours and ultimately its move into the metaverse with gaming the first monetization piece of the metaverse.”
While Microsoft will keep some content exclusive to Xbox, they will retain some Activision games for Playstation consoles.
Spencer said, “I’ll just say to players out there who are playing Activision Blizzard games on Sony’s platform: It’s not our intent to pull communities away from that platform and we remained committed to that.”
As Microsoft plans to buy the ‘World of Warcraft’ maker, it aims to increase its Game Pass subscription service. This service allows access to all its first-party games for no extra charge.
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