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The transaction could be seen as a victory for Activision’s long-time CEO Bobby Kotick, and some critics have sought to dispel that controversy. Mr. Kotick negotiated a huge premium for investors – Microsoft is paying $95 per share, about 45 percent above his company’s share price before the announcement – and will continue to run the company, at least until the deal is closed. The companies didn’t specify whether it would stay later, but said the studio would report back to Mr Spencer.
The deal is the biggest in the history of the games industry and broke the record a few days ago when Take-Two Interactive, creator of games like Grand Theft Auto, bought mobile game publisher Zynga for more than $11 billion.
The gaming industry, which has turned to cash since the pandemic increased industry profits, is rapidly consolidating. Last year, Electronic Arts and Take-Two entered a bidding war for a racing game company, Codemasters – which eventually sold it to EA for $1.2 billion – and another one when Microsoft bought Zenimax Media and its game studios in 2020. made a splash. 7.5 billion dollars.
By purchasing Activision, Microsoft gains access to some of the most popular and recognizable games, notably Call of Duty, World of Warcraft, Overwatch, Diablo and Candy Crush. Activision’s recent profits have been split fairly evenly between its three subsidiaries, with Candy Crush producer King pulling the most in operating income at $303 million in its latest quarterly earnings report. Activision generated $244 million in operating income and Blizzard pulled $188 million.
But Activision’s gaming efforts are facing headwinds, with delays between the latest game-reviewed Call of Duty game and games like Diablo and Overwatch, which have seen key directors leave the company in recent months after a string of scandals.
One of the main drivers of deals is the arms race for exclusive content: Locking down a well-known franchise like Call of Duty or Skyrim, for example, could force fans of those games to switch from Sony’s PlayStation console to Microsoft’s rival Xbox system. chooses to make a special game.
The acquisition will likely be one of the biggest announced this year and will continue the boom in the merger business. Last year, $5.8 trillion deal It was hit, beating the previous record of $1 trillion, as companies embraced acquisitions as a way to grow their businesses.
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