Microsoft buys video game giant Activision Blizzard in $68.7 billion all-cash deal

Microsoft announced Tuesday it will buy video game giant Activision Blizzard in a $68.7 billion all-cash deal. The acquisition also bolsters Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million subscribers.

As part of the deal, Activision CEO Bobby Kotick, will continue to serve as CEO of Activision Blizzard. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming. Kotick has recently faced calls to resign over the cultural problems within his company.

Activision, which is known for popular games such as “Call of Duty” and “Tony Hawk’s Pro Skater,” has been mired in controversy for the last several months following reports of sexual misconduct and harassment among the company’s executives. On Monday, Activision said it fired dozens of executives after an investigation.

Microsoft has gotten more aggressive with gaming over the past several years. It bought “Minecraft” maker Mojang for $2.5 billion in 2014. And last year, Microsoft completed a $7.5 billion acquisition of game maker Bethesda.

In a statement, 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.” He added, “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Phil Spencer, CEO, Microsoft Gaming. “Together we will build a future where people can play the games they want, virtually anywhere they want.”

“For more than 30 years our incredibly talented teams have created some of the most successful games,” said Bobby Kotick, CEO, Activision Blizzard. “The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”

Mobile is the largest segment in gaming, with nearly 95% of all players globally enjoying games on mobile. Through great teams and great technology, Microsoft and Activision Blizzard will empower players to enjoy the most-immersive franchises, like “Halo” and “Warcraft,” virtually anywhere they want. And with games like “Candy Crush,” Activision Blizzard´s mobile business represents a significant presence and opportunity for Microsoft in this fast-growing segment.

With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.