There are companies that like acquisitions, there are companies that love acquisitions… and then there’s Microsoft, who seems to think that, just because it can, it’s a good idea to gobble up half the gaming industry in an effort to corner it. After the acquisition of Zenimax back in September 2020 — which granted the Redmond giant control of id Software, Bethesda, Arcane Studios, Machine Games and Tango Gameworks amongst other development studios — Microsoft announced the acquisition of Activision Blizzard, the biggest independent video games publisher in the world by 2021 numbers.
The all-cash deal is the biggest acquisition ever for the gaming industry, as well as the largest one in Microsoft’s history, at almost $70 billion (the company paid a 69% premium over the current stock market value of Activision Blizzard). That staggering amount of money grants Microsoft control of franchises such as Call of Duty, Spyro, Guitar Hero, Crash Bandicoot and Tony Hawk from Activision, as well as Warcraft, Diablo, Overwatch, Hearthstone and StarCraft from Blizzard (and Candy Crush from mobile games publisher King).
This acquisition makes Microsoft the world’s third-largest game company by revenue, behind only Tencent and Sony. The Redmond giant is taking over all of Activision Blizzard’s development studios including Beenox, Demonware, Digital Legends, High Moon Studios, Infinity Ward, King, Major League Gaming, Radical Entertainment, Raven Software, Sledgehammer Games and Treyarch among others. All the aforementioned studios put together account for almost 10.000 employees worldwide.
What’s in everyone’s mind, of course, is the question of what will happen to all the big Activision Blizzard franchises that are offered on multiple formats besides Xbox or PC. When the same question was expressed following the Zenimax deal, head of Microsoft Gaming Phil Spencer insisted that “the acquisition wasn’t done to keep the Skyrim maker’s games away from other companies” — only to change his tune a week later, noting that “this move is all about delivering great exclusive games that ship on platforms where Game Pass exists”. Since then Microsoft has honored all the multi-platform releases already under development by Zenimax studios before the acquisition but also made clear that future releases will be Xbox- and Windows- exclusive.
This time around Spencer had this to say about the ultra-expensive acquisition: “Upon closing, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog. The fantastic franchises across Activision Blizzard will also accelerate our plans for Cloud Gaming, allowing more people in more places around the world to participate in the Xbox community using phones, tablets, laptops and other devices you already own. Activision Blizzard games are enjoyed on a variety of platforms and we plan to continue to support those communities moving forward.”
Anyone can make of this what they will, but it is clear that the deal was made in order to add Activision Blizzard’s weight to the already extensive library of Game Pass (which surpassed the 25 million subscriber mark recently). Whether this development is beneficial to the gaming industry as a whole and to consumers worldwide will be revealed at the fullness of time. Microsoft does not have an encouraging track record of mergers that went well for the companies being bought into its fold, as its corporate culture often clashes with the spirit of creative teams not used to the kind of management Redmond is known for. There’s little doubt, though, that the company has significantly strengthened its position in the gaming market… again. Just how it plans to wield that advantage remains to be seen.