Activision Blizzard
Microsoft is ready for Activision Blizzard has to pay a hefty premium: The bid of $95 per share is a good 45 percent above the closing price of $65.39 on the previous US trading day on Friday. The game company is thus valued at a total of 68.7 billion dollars, as Microsoft announced on Tuesday.
BREAKING: The WSJ reports that Microsoft is buying Activision Blizzard, the troubled publisher behind Call of Duty and World of Warcraft, which has been facing crisis over the last year following numerous reports of sexual misconduct and discrimination. A seismic gaming deal— Jason Schreier (@jasonschreier) January 18, 2022
Controversial Activision Blizzard boss Bobby Kotick , should remain at the top of the game company, it said. Kotick had come under criticism in recent months following allegations of sexual harassment and discrimination at the company. Among other things, he was accused of not taking decisive action against manager misconduct.
Activision Blizzard was in the summer of State of California has been sued. The group has promoted a sexist corporate culture in which women are systematically disadvantaged, criticized the authority responsible for maintaining fair working conditions in the state, DFEH. The company initially denied the allegations, but then commissioned a law firm to investigate the allegations.
In The industry was also repeatedly asked whether a fresh start at Activision Blizzard with Kotick at the helm was even possible. However, with the support of his board of directors, he remained firmly in the executive chair. After completion of the takeover, Activision Blizzard will now report to Microsoft’s games boss Phil Spencer, who would then be Kotick’s boss.
Market position expanded
Microsoft expects to close the deal by the end of its next fiscal year, which runs through mid-2023. Among other things, the approval of the competition authorities must be obtained beforehand. The stock initially only went to around $85 in early US trading on Tuesday – which shows a certain skepticism among investors.
Microsoft, which already has game studios with well-known titles such as “Doom” and “Minecraft” under its roof, would significantly strengthen its market position with Activision Blizzard. The company’s games attract nearly 400 million players every month. Around 245 of these are attributable to the “Candy Crush” provider King, which was taken over a few years ago.
The games industry is currently in a good state in a big change. For one, more business is shifting from consoles and PCs to smartphones. There, the games can usually be played for free – but many users spend money on additional content or help. Given the size of the smartphone market, these small amounts add up to significant sums.
More and more games streamed
On the other hand, Microsoft is one of the platform providers trying to establish game streaming in the market. The games do not actually run on the users’ devices, but on servers in the network. The model offers the prospect of ongoing subscription revenue rather than a one-off sale of a console. However, fast and responsive Internet connections are a prerequisite for the model, which is still a niche offering.
Microsoft’s business with the Xbox console – as with the competitor Sony with its Playstation – has recently been held back by the global bottlenecks in chips and other components. Latest generation Xbox and Playstation devices remain hard to come by more than a year after their release. Activision Blizzard, like other industry players, benefited at times from the corona pandemic, in which people are spending more time with video games and smartphone games. Most recently, the company posted a slight increase in sales to a good two billion dollars in the quarter ended September. Earnings increased about six percent year-on-year to $639 million.
jb
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