Tuesday, 18 January 2022

Microsoft to buy Activision Blizzard in the biggest deal in video game history

Microsoft is making a massive play to buy Activision Blizzard, one of the largest publishing and development companies in video gaming. The deal is reportedly worth $68.7 billion, almost ten times the price that Microsoft paid to acquire the Zenimax and Bethesda family of publishers almost a year and a half ago.

News of the deal has sent seismic shockwaves through the video game industry. Activision Blizzard is traditionally one of the two biggest non-manufacturer video game companies in the West, competing for that title with Electronic Arts. Formed in 2008 from the merger of Activision and Vivendi Games (the former parent company of Blizzard Entertainment), the company is best-known for its giga-selling Call of Duty shooter franchise and the slew of IPs produced by Blizzard: WarCraft, StarCraft, Diablo and Overwatch. Activision Blizzard's other companies include online gaming giant King, creators of the Candy Crush series, and Major League Gaming, a huge player in the eSports field. Other franchises linked to the company include Crash Bandicoot, Skylanders and Guitar Hero. They have also published the Destiny series.

Microsoft's acquisition of Bethesda has already given them control of the Elder Scrolls, Fallout, Doom, Wolfenstein, Dishonored and Prey franchises, in addition to first-party Microsoft franchises like FORZA and Halo. Microsoft has also been buying up smaller studios, such as Obsidian Entertainment (Pillars of Eternity, The Outer Worlds, Grounded, Alpha Protocol) and inXile (creators of the Wasteland RPG series). They also control the Minecraft franchise after acquiring it in 2014.

The news will position Microsoft as the third-largest video game company in the world by revenue, behind only Sony and Chinese giant Tencent. It will be expected that Activision and Blizzard's formidable battery of franchises will join the Xbox Game Pass, a Netflix-like service allowing players to access a huge library of games for only a modest monthly subscription fee.

Activision Blizzard has recently endured a storm of controversy over long-standing allegations of harassment, bullying and unprofessional behaviour at several of its studios, but most notably Blizzard. Multiple staff have quit Blizzard in recent months and work on several in-progress games (such as the long-gestating Diablo IV and Overwatch 2) has been delayed as a result.

Microsoft buying Activision Blizzard will entail a massive shift in the gaming landscape and will likely see antitrust investigations to ensure that Microsoft is not acting anti-competitively. Sony PlayStation and Nintendo Switch owners will likely find themselves shut out as those franchises also become Xbox-platform exclusives, which will have enormous ramifications for customer choice.

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