Microsoft Officially Acquires Activision Blizzard, Nearly Two Years Later

Microsoft has officially closed its deal to buy Activision Blizzard for $68.7 billion, marking Microsoft's biggest acquisition of all time and one of the largest in the history of the business world across all sectors. The deal faced a good amount of regulatory pressure, as Microsoft faced scrutiny from government groups around the world. Key legal battles took place in the United States and the UK. Microsoft announced the deal in February 2022. The announcement of the deal closing came just hours after the UK's CMA itself signed off, and this was the final regulatory hurdle that Microsoft needed to clear to close the deal.

A key concern from the CMA centered on cloud gaming, and to help close the deal, Microsoft sold cloud-gaming rights to Ubisoft.

"All the games that are coming from Activision Blizzard in the next 15 years and those games that exist now, we have those streaming rights in perpetuity," Ubisoft said in its own announcement pertaining to the closure of the deal today.

Microsoft is paying Activision Blizzard $95 per share for the buyout. Microsoft's previous biggest acquisition was LinkedIn, which it paid $26.2 billion to acquire in 2016. For comparison, Disney bought Lucasfilm and the Star Wars series for $4.05 billion.

As part of the buyout, Activision Blizzard CEO Bobby Kotick is apparently planning to resign. Other high-ranking Activision Blizzard C-suite executives are leaving, too. Kotick will stay on through the end of 2023 and will report to Microsoft Gaming CEO Phil Spencer to help with the transition. Kotick is reported to be getting a $400 million pay package on the way out.

"As a result of the Merger and pursuant to the Merger Agreement, each of Reveta Bowers, Kerry Carr, Robert Corti, Brian Kelly, Robert Kotick, Barry Meyer, Robert Morgado, Peter Nolan and Dawn Ostroff resigned and ceased to be directors of the Company and members of any committee or subcommittee of the Company’s Board of Directors as of the Effective Time, and Keith R. Dolliver and Benjamin O. Orndorff, who constituted the directors of Merger Sub as of immediately prior to the Effective Time, became the directors of the Company."

Do not expect Activision or Blizzard games to appear on Game Pass today or even soon, though. The Game Pass Twitter/X account said work "can now begin" to bring games from Activision Blizzard and King to Game Pass. "We can't wait to share more details in the coming months," Microsoft said.

Microsoft Gaming CEO Phil Spencer reacted to the deal closing, writing, "As one team, we'll learn, innovate, and continue to deliver on our promise to bring the joy and community of gaming to more people."

He added: "We'll do this in a culture that strives to empower everyone to do their best work, where all people are welcome, and is centered on our ongoing commitment of Gaming for Everyone."

Spencer said in a memo to staff, "We are eager to learn from their creativity, exchange insights and best practices, and empower our new colleagues to bring their visions to the widest possible audience."

The Microsoft/Activision deal originally had a deadline to close of July 18, but the two companies renegotiated the terms of their pact and extended the deadline to October 18.

In April, the UK's Competition & Markets Authority blocked the deal over concerns about the cloud gaming market. Microsoft and Activision secured a partial victory in July when the companies won a key court case with the FTC in the United States.

Microsoft closed the deal today, October 13, which is just ahead of the October 18, 2023 deadline. Per the terms of the merger agreement, Microsoft would have had to pay Activision Blizzard a breakup fee of more than $4.5 billion if this deal didn't come together.

Microsoft is buying the entirety of Activision Blizzard, which means Microsoft will now own and operate franchises like Call of Duty, Diablo, Overwatch, and Warcraft, as well as King's popular Candy Crush games. Microsoft had said it didn't need to acquire Activision Blizzard to fulfill its gaming ambitions (and Activision said it would have been fine without being sold, too), but buying the Call of Duty giant will help Microsoft accelerate its plans.

A key point in this saga has been Call of Duty, and in July of this year, Microsoft and Sony announced a 10-year deal to keep Call of Duty on PlayStation platforms until at least 2033. Microsoft offered a 10-year deal to Sony months ago, but the PlayStation company only just agreed to it after the FTC decision. Microsoft also has a 10-year deal in place with Nintendo to bring future Call of Duty releases to the company's platforms, including potentially the Switch 2.

No doubt there will be many additional developments and updates pertaining to this deal and the future of Xbox now that it has Activision Blizzard under its wing, so keep checking back for more.

Microsoft Gaming CEO Phil Spencer Statement:

We love gaming. We play games, create games, and know first-hand how much gaming means to all of us as individuals and collectively, as a community. And today, we officially welcome Activision Blizzard and their teams to Xbox. They are the publishers of some of the most played and most beloved franchises in gaming history across console, PC and mobile. From Pitfall to Call of Duty, World of Warcraft to Overwatch, Candy Crush Saga to Farm Heroes Super Saga, their studios have pushed the boundaries of gaming for players around the world.

I’ve long admired the work of Activision, Blizzard, and King, and the impact they’ve had on gaming, entertainment, and pop culture. Whether it was late nights spent playing the Diablo IV campaign with friends from start to finish, gathering the entire family in the rec room for our weekly Guitar Hero night, or going on an epic streak in Candy Crush, some of my most memorable gaming moments came from experiences their studios have created. It is incredible to welcome such legendary teams to Xbox.

As one team, we’ll learn, innovate, and continue to deliver on our promise to bring the joy and community of gaming to more people. We’ll do this in a culture that strives to empower everyone to do their best work, where all people are welcome, and is centered on our ongoing commitment of Gaming for Everyone. We are intentional about inclusion in everything we do at Xbox – from our team to the products we make and the stories we tell, to the way our players interact and engage as a wider gaming community.

Together, we’ll create new worlds and stories, bring your favorite games to more places so more players can join in, and we’ll engage with and delight players in new, innovative ways in the places they love to play including mobile, cloud streaming and more.

Players have always been at the center of everything we do. And as we grow, we’ll continue to keep players at the heart of it all. We’ll continue to listen to your feedback, build a community where you can be yourself, where developers can do their best work, and continue to make really fun games. As promised, we will also continue to make more games available in more places – and that begins now by enabling cloud streaming providers and players to stream Activision Blizzard games in the European Economic Area, a commitment made to the European Commission. Today we start the work to bring beloved Activision, Blizzard, and King franchises to Game Pass and other platforms. We’ll share more about when you can expect to play in the coming months. We know you’re excited – and we are too.

For the millions of fans who love Activision, Blizzard, and King games, we want you to know that today is a good day to play. You are the heart and soul of these franchises, and we are honored to have you as part of our community. Whether you play on Xbox, PlayStation, Nintendo, PC or mobile, you are welcome here – and will remain welcome, even if Xbox isn’t where you play your favorite franchise. Because when everyone plays, we all win. We believe our news today will unlock a world of possibilities for more ways to play. Thank you for the ongoing support. We have so much more to come in the months ahead – I’m excited for the future and cannot wait to share it with you.