A few days ago, Microsoft announced that it will acquire Activision Blizzard for $95 per share in an all-cash deal valued at $68.7 billion (approximately RMB 436.4 billion), including Activision Blizzard’s net cash. This will be the largest acquisition in Microsoft's history.
The acquisition is calculated to represent a premium of about 45% and the stake is worth about $74 billion, and the deal has been approved by the boards of Microsoft and Activision Blizzard. After the deal, Microsoft will become the world's third-largest gaming company after Tencent and Sony.
The so-called one stone stirred up a thousand waves. As soon as the news of Microsoft's acquisition of Activision Blizzard came out, not only did Activision Blizzard surge by more than 37% before the market, but the news also instantly occupied the headlines of major media and became popular in the global game industry and many consoles. There has been a lot of discussion among gamers, and even passers-by who don't understand the game at all will sigh with emotion about the power of Microsoft's "money capability".
Microsoft's net operating cash flow in fiscal 2020-2021 was $76.74 billion. This $68.7 billion expenditure means that Microsoft will use about 11 months of operating net cash flow, and this transaction is also the largest in Microsoft's history. an acquisition.
Microsoft has been in the game industry for a long time. As early as the turn of the century, it established and launched its video game brand, Xbox, to compete with Nintendo and Sony in the field of console games. In recent years, it has made frequent moves in the game industry.
Judging from Microsoft's actions in the past two years, before the acquisition of Activision Blizzard, it first took over Bethesda's parent company for $7.5 billion, and obtained "The Elder Scrolls", "Fallout", "Murder" and "Evil Spirit Possession". In September 2021, it will spend $2.5 billion to acquire the classic sandbox game "Minecraft" development team Mojang and the "Minecraft" brand owned by it. The acquisition of Activision Blizzard is a one-time acquisition of Activision, Blizzard, King Studio and its franchises, including World of Warcraft, Diablo, Overwatch, Call of Duty and Candy Crush and other packages into their game ecosystem.
If the acquisition plan is successfully implemented, and Microsoft does not conduct a large-scale split and reorganization of Activision Blizzard's organizational structure after the acquisition, then Microsoft's game development department will have more than 30 studios, covering almost all mainstream games on the market. This is enough for Microsoft to take the lead in the competition in the game market.
Microsoft's acquisition of Activision Blizzard took a fancy to the IP influence of its games and its game production and distribution capabilities. From the perspective of the game market, Blizzard's "Call of Duty" series can be said to be at the top of the US game sales rankings.
According to the data released by NDF in the United States for the first 11 months of 2021, "Call of Duty: Black Ops Cold War" has ranked in the top three sales for 8 consecutive months. Although the ranking dropped in September and October, "Call of Duty: Black Ops Cold War": Pioneer" was released, and it reached the top spot in November, which shows its huge influence.
For Activision Blizzard, this acquisition gave it a chance to be reborn. Earlier, Activision Blizzard's Blizzard division was deeply embroiled in sexism and sexual harassment scandals, and Activision Blizzard's stock price plunged nearly 46% to $56 from a peak of $104 per share.
This acquisition by Microsoft not only enriches its game content camp but also enhances its game publishing and e-sports production capabilities. It is also equivalent to pulling Activision Blizzard, allowing it to escape from the quagmire of the Blizzard scandal. And Microsoft's strong capital injection can allow Activision Blizzard to focus more on game content development and production, and some projects that have been put off may be able to be put back on the agenda. After the two complete the acquisition, the final winners are the global players.