Microsoft Bets Big on the Metaverse with $68.7B Deal For Activision Blizzard

Microsoft will acquire Activision Blizzard for $95 per share, around 45 percent above the company’s previous share price

article-image

Source: Blockworks

share

key takeaways

  • Microsoft will acquire Activision Blizzard for $95 per share, around 45 percent above the company’s previous share price
  • Activision shares spiked more than 25% on the news

Microsoft is set to acquire gaming publisher Activision Blizzard in a $68.7 billion all-cash deal meant to further the trillion-dollar company’s metaverse ambitions, experts say.

David Nage, a portfolio manager for digital-assets investment firm Arca, told Blockworks that Microsoft’s plans for the metaverse have been growing. 

“Over the course of the last few quarters [Microsoft] has been aggressively building out into the metaverse,” Nage said. “A very large part of their business line is Xbox gaming and so immediately I thought that this had some sort of semblance or focus on the metaverse.”

Microsoft called the acquisition a way “to accelerate the growth in Microsoft’s gaming business” and to “provide building blocks for the metaverse” in a statement announcing the deal on Tuesday. 

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” Microsoft Chief Executive Officer Satya Nadella said.

Microsoft, which makes Xbox consoles and produces Minecraft, will acquire Activision for $95 per share, around a 45 percent premium. 

With the purchase, Microsoft will gain hit gaming franchises such as Call of Duty and Candy Crush. When the transaction closes, Microsoft is set to become the third-largest gaming company by revenue. 

Microsoft made headlines when Nadella first mentioned the term “metaverse” at its annual conference in November 2021. Nadella said the software giant will roll out almost 100 new services and updates in three areas — including the metaverse. Additionally, Microsoft is set to release its own virtual reality goggles and gloves later this year. 

“As the digital and physical worlds come together, we are creating an entirely new platform layer which is the metaverse,” Nadella said. “In a sense, the metaverse enables us to embed computing into the real world and to embed the real world into computing bringing real presence to any digital space.”

The acquisition comes as Activision has faced several allegations of sexual harrasments and gender inequities that resulted in a lawsuit from California regulators in July 2021 for promoting a culture of “constant sexual harrasment,” according to The Verge.  

Activision CEO Bobby Kotick is expected to exit the company after the deal closes, the Wall Street Journal reported, citing people familiar with the matter. 

Nage predicts that Microsoft may tap Activision properties to experiment with non-fungible tokens in the company’s video games and will eventually “build a robust metaverse.”

“I think this is just the start of Microsoft’s adventure into play-to-earn gaming,” Nage said. “Microsoft will start to look beyond Activision Blizzard and into some of the [blockchain-based] games that are starting to evolve today … I think they will start to incorporate some of [those] into their own metaverse.” 

Microsoft (MSFI) shares traded 2.43% lower to $302.65 at the close. Activision Blizzard Inc. (ATVI) soared 25.8% to $82.31.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million