Microsoft recently unveiled its plans to acquire Activision Blizzard in a huge deal worth around $70 billion. The deal is set to be one of the largest acquisitions in tech within recent years and is projected to help strengthen Microsoft as a giant in gaming for years to come — although the deal does not come without its concerns.
Bobby Kotick, the embattled and caustic CEO of Activision, will reportedly continue in his role with the company. Activision employees had staged walkouts in the past and called on Kotick to step down due to claims of allegedly having ignored widespread harassment and discrimination at the company for years.
The widely reported $70 billion deal would be Microsoft’s largest in the company’s history and is certainly the tech giants most challenging acquisition it has undertaken as it plans to turn its Game Pass subscription service into the “Netflix of gaming”, as some have called it. When the deal officially closes, Microsoft has stated that it will be the world’s third-largest game company by sales, with dozens of game studios, including the developers of popular games such as the Call of Duty franchise, World of Warcraft, and Candy Crush.
“Together with Activision Blizzard, we have an incredible opportunity to invest and innovate, to create the best content, community, and cloud for gamers to build substantial new value for our shareholders,” Microsoft’s Chief Executive, Satya Nadella, stated recently on a media call.
Microsoft switched up the game years ago by bringing its clients to subscription-based cloud services, which resulted in a market value of $2 trillion and a consistent status as one of the world’s top tech companies. The acquisition of Activision has Microsoft in a position to implement the same strategy on consumers by convincing gamers to leave their overpriced and unnecessary hardware to game on their cloud platform.
Expanding the company’s cloud-based gaming business will assist the tech giant in growing more in consumer-facing businesses. That could eliminate the lead PlayStation currently has on it in-game hardware and the lead Amazon has developed on Microsoft in cloud services. Microsoft’s strategy puts cloud computing at the center of a large collection of different businesses, from SaaS solutions to digital advertising.
Microsoft’s pivot to gaming and the cloud has slowly been on its way for many years. The tech company has been relying on offering the company’s customers cloud-computing services to boost their businesses. This strategy has been behind Microsoft’s rise to the status of the world’s second-most valuable company behind Apple, with a total market valuation of over $2 trillion.
With more and more gamers playing on smartphones rather than expensive gaming consoles, tech firms around throughout the globe are racing to build out services that will stream high-end games to all kinds of devices the same way movies and TV shows are being streamed. Amazon, Google, Sony, and a host of smaller players are trying, but Microsoft has taken an early lead in the rising cloud-based gaming industry by spending billions on acquisitions and building critical infrastructure.