Microsoft's Big Metaverse Move: Acquiring Activision Blizzard for $69 Billion

Microsoft Crop. is buying gaming giant Activision Blizzard Inc. for $69 billion as part of plans to bolster its games and metaverse.

Activision Blizzard has a portfolio of iconic games such as Call of Duty, Overwatch, Candy Crush, World of Warcraft and Tony Hawk's Pro Skater. Once the deal closes, the company's games will join Microsoft's Xbox Game Pass service, which has 25 million subscribers.

According to Microsoft's Jan. 18 statement, the company will acquire Activision Blizzard for $95 per share, valuing it at $68.7 billion. When the deal closes in fiscal 2023, Microsoft will become the third-largest gaming company by revenue, behind Riot Games owner Tencent and Playstation developer Sony.

Together with Activision Blizzard, we will usher in a new era of gaming that puts players and creators first, and makes games safe, inclusive, and accessible to everyone.

— Satya Nadella (@satyanadella) January 18, 2022

Microsoft said the acquisition will support the growth of its services across mobile, PC, console gaming, and cloud gaming, noting in particular that it will "provide the building blocks for the Metaverse." Satya Nadella, CEO and Chairman of Microsoft, said:

"Gaming is the most dynamic and exciting entertainment category on any platform today and will play a key role in the growth of the Metaverse platform."

As part of the acquisition, Microsoft said Activision Blizzard CEO Bobby Kotick will continue to lead the company until the deal closes, after which control will hand over to Microsoft Games CEO Phil Spencer.

Spencer welcomed the deal in an Xbox blog post, emphasizing that the company is working hard to make cloud gaming available on as many devices as possible. However, he didn't mention the Metaverse or NFTs, two areas that have been resisted by certain parts of the gaming community.

Spencer wrote: "Activision Blizzard's incredible lineup of games will also accelerate our cloud gaming plans, allowing more people in more parts of the world to join the Xbox community on phones, tablets, laptops and other devices you already own. "

Here are some of the sentiments I heard from Activision Blizzard employees today:

- Optimistic about management changes and positive culture at some of the Xbox-owned studios

- Anger at Microsoft for giving Bobby Kotick a lot of money and a soft exit

-Determination to continue organizing

— Jason Schreier (@jasonschreier) January 18, 2022

Nadella first unveiled Microsoft's plans for the Metaverse in November with an update to its "Teams" service and a product called "Dynamics 365 Connected Spaces." The "Mesh" upgrade to Teams will introduce personalized digital avatars and immersive spaces to meet in the Metaverse later this year.

Nadella also said that people can "fully expect" to see Microsoft integrate Metaverse features into the Xbox console, but he didn't reveal any specific plans or specifics.

It's unclear whether Microsoft's Xbox Metaverse initiative will introduce NFTs, and Spencer said in November that he believed the experiments taking place on NFTs were more "exploitative than entertaining."

Spencer noted that if the Xbox Store supports NFTs, the company will aggressively weed out any bad behavior or content.

The Wall Street Journal reported last week that 100 people from Microsoft's augmented reality team have left the company in the past year to join its metaverse competitor, Meta (formerly Facebook).

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