Microsoft announced on Tuesday that it would buy videogame publisher Activision Blizzard for $68.7 billion (approximately Rs. 512,362 crores) in an all-cash deal, or $95 per share, including Activision Blizzard’s net cash. When the deal is complete, the Redmond-based software giant will be the world’s third-largest gaming company by revenue, behind Tencent and Sony.

According to Microsoft, the purchase is subject to usual closing conditions, regulatory approval, and Activision Blizzard shareholder approval. The transaction is set to finalize in the fiscal year 2023. Activision Blizzard and Microsoft Gaming will continue to operate independently until the acquisition is completed.

Microsoft’s offer of $95 per share is a 45 percent premium over Activision’s Friday closing price. Before being delayed for news, Activision’s stock was up over 38% at $65.39. Microsoft’s Game Pass, which already has over 25 million customers, will benefit from the deal. Activision Blizzard games will be included in the game pass, according to the business.

During the epidemic, demand for video games has increased as consumers who are stranded at home play more games to keep themselves engaged. Activision’s collection of titles, including Call of Duty and Overwatch, provides Microsoft’s Xbox a leg up over Sony’s PlayStation, which has had a more consistent supply of exclusive games for years.

Take-Two Interactive Software, a rival videogame publisher, said last week that it will buy FarmVille developer Zynga for $11 billion in cash and stock, marking one of the largest industry-wide acquisitions of all time.

Bobby Kotick will remain CEO of Activision Blizzard, according to Microsoft, and he and his team “will keep their emphasis on driving efforts to further develop the company’s culture and accelerate business growth.” The Activision Blizzard business will report to Phil Spencer, Microsoft Gaming’s CEO after the transaction is completed.

“Gaming is the most dynamic and exciting area in entertainment across all platforms today,” Microsoft Chairman and CEO Satya Nadella said in a statement. “Gaming will play a major role in the development of metaverse platforms.” We’re putting a lot of money into world-class content, community, and cloud to usher in a new era of gaming that prioritizes players and creators and makes gaming safe, inclusive, and accessible to everyone.”

“Players all across the world enjoy Activision Blizzard games, and we believe the creative teams are working on their best work yet,” stated Phil Spencer, Microsoft Gaming’s CEO. “Together, we will create a future in which people can play their favorite games almost everywhere.”

“Our extremely talented teams have created some of the most successful games for more than 30 years,” stated Bobby Kotick, CEO of Activision Blizzard. “The combination of Activision Blizzard’s world-class talent and incredible franchises, as well as Microsoft’s technology, distribution, talent access, ambitious vision, and shared dedication to gaming and inclusivity, will help ensure our continued success in an increasingly competitive sector.”

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