On Tuesday, tech giant Microsoft announced that it would buy popular video game giant Activision Blizzard in an all-cash deal. The deal, which will cost the the software and hardware company $68.7 billion, would be its largest acquisition, as of now and tens of billions more than its purchase of LinkedIn in 2016, which was bought for $26.2 billion. Activision shares rose by 37 percent, while Microsoft shares fell by almost two percent, after the announcement.
Activision has recently hit the headlines for all the wrong reasons. Although it is known for its popular games including Candy Crush, World of Warcraft and more, it had been facing several sexual harassment as well as sexual misconduct claims. Employees also spoke of cultural problems within the company. There had been strong calls for its CEO Bobby Kotick to resign. On Monday, Activision said that it had terminated dozens of executives; after an investigation.
The deal says that Bobby Kotick will remain as the CEO during its transition period. The company will report to Phil Spencer, who is the boss of Microsoft’s popular console Xbox. Kotick’s future in the company remains uncertain after the deal is closed, sometime in 2023.
Microsoft has been strengthening its gaming division, these past few years. It has acquired several popular online gaming companies including Minecraft maker Mojang in 2014 for $2.5 billion and Bethesda for $7.5 billion. Activision will come onboard not only with Candy Crush and World of Warcraft but will also add Call of Duty and Pro Skater to Microsoft’s growing online library of video games.
On a call to CNBC on Tuesday morning, CEO Satya Nadella said that their vision of what a metaverse could be included different virtual worlds as he said that they believed that it “won’t be a single centralized metaverse.”
As of now, the virtual world is dominated by games that are played using both Augmented Reality and Virtual Reality. Tech giants including Apple and Microsoft are developing headsets to give a new and immersive experience especially as the current belief is that the metaverse is poised to expand much beyond its current avatar of mainly being the place to be for video games.
