Game on: The largest acquisition in video game history just got a big green light
Game on
Yesterday, a US federal judge gave Microsoft the green light to proceed with its planned $69bn acquisition of video game maker Activision Blizzard, effectively thwarting the FTC's attempt to halt the deal. The decision resulted in Activision Blizzard's share price surging to $92, the closest it's come to the $95-per-share price that Microsoft offered, suggesting investors expect the deal to go through.
Since its announcement in January 2022, the deal has encountered various obstacles, including a recent block by UK regulators, but this ruling paves the way for its completion before the agreed-upon deadline of July 18th. It also means Microsoft will avoid paying Activision the hefty $3 billion breakup fee that would have been incurred had the deal fallen through.
Leveling up
Activision Blizzard came into existence following a merger in 2008 between two prominent video game publishers, Activision and Vivendi Games. That brought together the creators of popular franchises such as Call of Duty and Guitar Hero with the talented developers behind World of Warcraft, Diablo, and Overwatch, establishing a behemoth in the video game industry.
However, just as the new gaming partnership was taking shape, a seismic shift was occurring with the rise of mobile gaming. As smartphones became ubiquitous, portable gaming devices were suddenly in millions of pockets. Recognizing the trend, Activision Blizzard dug into its pockets again, this time to acquire King, the producer of mobile sensation Candy Crush, for $5.9 billion in 2016. That laid the foundation for the company's mobile division, which last year accounted for nearly half of its $7.5bn+ of sales.
With mobile gaming still the fastest-growing segment of the entire market, per analytics firm NewZoo, Microsoft looks set to add a prestigious roster of games into its Xbox empire... with expertise in every format.
