The giant Microsoft has reached an agreement to buy Activision Blizzard, a publisher and developer of video games as popular as Call of Duty Y candy crush, for 68,700 million dollars (60,320 million euros), as reported by the technology company in a statement on Tuesday. It is the largest operation in the software maker’s 46-year history.
The operation has been described as “big bet for the metaverse”, the new emerging generation of the Internet, which merges the traditional online world with virtual and augmented reality. The operation also represents a challenge to the regulatory attempts of the authorities to limit the absolute power of the big technology companies, in which Democrats and Republicans go hand in hand. “Gaming is the most dynamic and exciting category of entertainment on all platforms today and will play a key role in the development of metaverse platforms,” said Satya Nadella, CEO of Microsoft.
The one that is one of the three most valuable companies in the world will pay 95 dollars for each of the shares of Activision Blizzard, which represents a premium of 46% with respect to the price at which they closed this Monday. Shares of Microsoft fell 1% after the acquisition announcement, while Activision shares gained around 40% in pre-market trading today. Microsoft, a company led by Satya Nadella, has stressed that after closing the deal it will become the third largest video game company in the world by revenue level, only behind Tencent and Sony, reports Reuters.
This agreement far exceeds the purchase of Zynga by Take-Two for 12,700 million (11,152 million euros), announced last week and which had become the largest acquisition agreement in the video game segment, according to the agency. In 2020, Microsoft also announced the purchase of ZeniMax Media, the parent company of Bethesda Softworks, one of the world’s largest private video game developers and publishers, for $7.5 billion.
In addition to its main emblems, Call of Duty Y candy crush, Activision Blizzard is responsible for the popular video game sagas warcraft, Devil Y Overwatch. It has a workforce of around 10,000 employees and in 2020 it achieved net profits of 2,197 million (1,929 million euros) and a turnover of 8,086 million dollars (7,100 million euros).
Activision has been in the eye of the hurricane for months due to complaints of a climate of systematic sexual harassment of company employees. The firm’s CEO, Bobby Kotick, would have been aware of this toxic climate for years without reporting it to the board of directors. In fact, after uncovering the scandal, an investigation by the newspaper The Wall Street Journal, the State of California Department of Good Labor Practices sued Activision in July for underpaying and discriminating against its female employees, as well as a “workplace culture of sexual harassment.” Since then, the company’s shares had lost almost half their value, from the $100 per share they reached in February. After the acquisition, the video game company will report directly to Phil Spencer, CEO of that division at Microsoft.
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The scandal around the work environment has already taken its toll on a company that is struggling to adapt to the end of a phase in which the consumption of video games was driven by the forced immobility of the pandemic. In November, Activision delayed the release of two long-awaited games and advanced a fourth-quarter sales forecast below Wall Street expectations. Kotick, who has led the company for three decades, remained under pressure from employees who were urging him to resign over his role in the scandal. The manager apologized and promised to make changes and will now maintain his position after the purchase by Microsoft, although subordinate to Spencer.
Microsoft hopes to add the Activision catalog to its subscription GamePass, which recently reached 25 million subscribers. Activision will contribute its almost 400 million monthly users. Adding Activision’s portfolio of popular titles will allow Microsoft to expand its own offering for the Xbox console and better compete with rival Sony’s PlayStation. Most of Activision’s games were already published on Xbox consoles. After the operation is completed – the closure is scheduled for this year, after receiving the approval of the regulators -, the company that owns Xbox will have 30 internal video game development studios.
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