The largest acquisition in the history of the gaming industry has been completed. On the evening of October 13th Beijing time, Microsoft announced that it had completed its acquisition of game manufacturer Activision Blizzard. After the acquisition is completed, Activision Blizzard's ordinary shares will no longer be listed for trading on NASDAQ.
On January 18, 2022, Microsoft announced a $68.7 billion cash acquisition of American gaming company Activision Blizzard, with Microsoft offering $95 per share. As of now, Activision Blizzard's stock price is $94.42, indicating that the final size of the transaction has hardly changed in the past two years.
Activision Blizzard is a well-known game production and distribution company in the United States, with well-known game series such as Call of Duty, Warcraft, Candy Legend, Hearthstone, and StarCraft. It has approximately 10000 employees worldwide.
This acquisition is also the largest since Microsoft's establishment. Prior to this, Microsoft's largest transaction was the acquisition of LinkedIn, a US workplace social platform, for $26.2 billion in 2016. In the gaming industry, Microsoft has also launched multiple acquisitions, including the acquisition of Mojang Studios, a game developer for My World, for $2.5 billion, and the acquisition of ZeniMax Media, a gaming company that owns series such as "Ancient Scrolls", "Radiant", and "Destroyer" for $7.5 billion. After the acquisition was completed, Microsoft owned 30 gaming studios and became the world's third largest gaming company by revenue, second only to Tencent and Sony.
Microsoft's gaming business revolves around the gaming console Xbox and has shifted in recent years to promoting game subscription services such as Xbox Game Pass and cloud games. This acquisition will help Microsoft promote its game subscription service Game Pass globally. Microsoft CEO Nadella once hoped to turn Game Pass into Netflix in the gaming industry. According to Microsoft's statement, Activision Blizzard's games will join the Game Pass subscription lineup in the future. At the time when Microsoft announced its acquisition of Activision Blizzard, due to the still popular concept of "metaverse", the market once interpreted Microsoft's consideration of enhancing the metaverse layout strength in promoting the transaction.
After the transaction is completed, the current CEO of Activision Blizzard, Bobby Corddick, will continue to serve as the CEO of Activision Blizzard until the end of 2023 and report to Microsoft Games CEO Phil Spencer. On January 1, 2024, Kodak will leave Activision Blizzard. Several other Activision Blizzard executives will also leave.
Microsoft initially expected the acquisition of Activision Blizzard to be completed by July 18, 2023. However, due to the failure to obtain antitrust approval from major market regions before this, Microsoft postponed the expected completion date of the transaction to October 18 in July 2023.
Due to the huge scale of the transaction, Microsoft was once caught in an antitrust quagmire. Subsequently, Microsoft was investigated by multiple countries such as the European Union, the United States, and the United Kingdom. 38 countries and regions such as China, Japan, and Brazil had previously approved Microsoft's acquisition of Activision Blizzard.
Microsoft has made multiple compromises to advance the acquisition. When the EU approved the transaction in May, Microsoft made three commitments to the EU. Within 10 years, consumers in the European Economic Area (EEA) will receive free licenses to play all current and future Activision Blizzard PC (personal computer) and console games on any cloud game streaming service; Within 10 years, cloud game streaming service providers will also receive free licenses to provide players with any Activision Blizzard PC and console games.
The UK regulatory agency, the Competition and Market Authority (CMA), once blocked the transaction, claiming that it could harm competition in the cloud gaming industry. On August 22nd, Microsoft submitted a new agreement to British regulatory authorities to acquire Activision Blizzard. According to this agreement, Microsoft will transfer the cloud game rights of all current and new Activision Blizzard PC and console games released within the next 15 years to French game publisher Ubisoft. On October 13th, CMA announced that it had accepted Microsoft's remedy to grant the copyright of Activision Blizzard cloud games to Ubisoft and approved Microsoft's acquisition of Activision Blizzard.
In the second quarter of 2023, Microsoft achieved a revenue of 56.2 billion US dollars, a year-on-year increase of 10%, and the growth rate remained the same as the previous quarter; Net profit increased by 23% year-on-year to $20.1 billion. Activision Blizzard's revenue for the same period was 2.21 billion US dollars, a year-on-year increase of 34%; The net profit was $587 million, a year-on-year increase of 109.6%.