Microsoft’s Massive Bet on the Metaverse Begins with a $69B Acquisition

Global computing software giant Microsoft has announced the acquisition of video game developer Activision Blizzard in an all-cash deal worth $68.7B.
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Quick take:

  • Microsoft is buying Activision Blizzard in an all-cash deal worth $68.7 billion.
  • The computing software giant believes the acquisition will provide the building blocks for the metaverse.
  • Microsoft CEO Satya Nadella said gaming will play a crucial role in the development of metaverse platforms.

Global computing software giant Microsoft said Tuesday it is buying leading video game developer Activision Blizzard in an all-cash deal of $95.00 per share, valuing the acquisition at $68.7 billion.

Microsoft believes the acquisition will provide the building blocks for the exciting virtual world called the metaverse

Commenting on the acquisition, Microsoft Chairman and CEO Satya Nadella said “gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” adding that the investment will “usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

The acquisition will make Microsoft the third-largest gaming company in the world by revenue, putting it behind China’s Tencent and Japan’s Sony.

The acquisition comes loaded with some of the most popular franchises in the gaming community, including “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,”.

In addition, Microsoft’s gaming unit will gain exposure to the exciting new world of eSports gaming through Major League Gaming, including its expansive network of studios around the world with nearly 10,000 employees.

Nadella said the Windows maker was investing deeply in world-class content, community and the cloud, thereby accelerating growth in Microsoft’s gaming business across mobile, PC, console and cloud.

Activision CEO Bobby Kotick told CNBC on Tuesday that the metaverse race helped prompt the Microsoft deal.

Approximately 3 billion people play games today, fueled by the new trend of interactive entertainment. The metaverse is widely seen as the next frontier in gaming, with some of the leading developers already leaping into the interactive virtual world.

Last month, Ubisoft and Jam City launched their first titles for their metaverse gaming franchises while several blockchain gaming companies continue to troop in. 

Although Microsoft lost key talent from its HoloLens unit to rivals Meta Platform and Apple, the company seems to have bigger plans for the metaverse following today’s announcement.

Microsoft will gain access to Activision Blizzard’s 400 million monthly gaming users, while the game developer will have at its disposal the computing software company’s exciting array of artificial intelligence and programming talent.

Writing in the New York Times, Andrew Ross Sorkin and Michael J. de la Merced noted “adding Activision could bolster the virtual reality offerings from Microsoft’s Xbox unit as it competes with Facebook’s Oculus system,” especially given the strides tech rival made after changing its corporate name to Meta Platforms.

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