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Microsoft Acquires Activision

ActivisionNews broke after market close yesterday that Microsoft is acquiring Activision Blizzard.

The acquisition puts many gaming franchises into Microsoft’s hands, including Call of Duty, Warcraft/StarCraft, Diablo, Tony Hawk, Candy Crush, and many others.

In recent years, Activision has grown its revenue and is generating healthy profits: $9B a year.  Globally, the gaming market will continue to expand.

Microsoft (NYSE:MSFT) is paying a premium at $95/share ($74 billion) though analysts feel the valuation is reasonable.  Less cash on hand, the true price is $68 billion.  Microsoft is paying for an enterprise that is making 13% on this money ($9bn a year), and that doesn’t factor in growth or eliminating redundancies.

Microsoft also has the opportunity now to leverage Activision to make Xbox-exclusive content to drive hardware sales.  Even Xbox-first or Xbox-premium content will assist.

Goldman Sachs says “Microsoft stated it see opportunities to be a key player in the future metaverse era.”  While the “metaverse era” is presently somewhere between a pipe dream and an acid flashback, the move does position Microsoft to instantly be a leader in gaming.



1 Comment

  1. Lesconen:

    By purchasing Activision Blizzard, Microsoft seems to be attempting to obtain control of well-known gaming properties and establish itself as a dominant force in the gaming market https://geometrydashmeltdown.io

    November 28, 2023 @ 11:42 pm | Reply

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