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The deal, according to Satya Nadella, will play a key role in the development of metaverse platforms.
Microsoft is buying Activision, the embattled publisher of Call of Duty, World of Warcraft, and Diablo. Activision will be valued at $68.7 billion, a considerable increase over Microsoft's $26 billion purchase of LinkedIn in 2016. It's Microsoft's biggest foray into gaming, and after the transaction is completed, the business claims it will be the third-largest gaming company in terms of sales, behind Tencent and Sony.
Once the acquisition is finalized, Microsoft wants to add many of Activision's games to Xbox Game Pass. As a result of its acquisition of Activision, Microsoft will soon be able to release games like Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush.
Microsoft's CEO of gaming Phil Spencer stated that they will provide as many Activision Blizzard games as they can within Xbox Game Pass and PC Game Pass, both new releases and games from Activision Blizzard's tremendous catalogue. Microsoft continues to buy studios to grow Xbox Game Pass's membership base, which presently stands at 25 million.
Microsoft CEO Satya Nadella claimed that the company is investing substantially in world-class content, community, and the cloud in order to usher in a new era of gaming that emphasizes players and creators while also making gaming safe, inclusive, and accessible to everyone.
Microsoft's agreement comes after months of allegations of sexual harassment against Activision Blizzard. The California Department of Fair Employment and Housing (DFEH) sued Activision Blizzard in July for creating a culture of ongoing sexual harassment. Since then, more employees have come out with sexual misconduct charges, and the company settled with the US Equal Employment Opportunity Commission in September for $18 million. The deal is being disputed, and sources claim that over 40 Activision Blizzard employees have departed the company since July.
Microsoft doesn't indicate how it plans to address these issues, but it does declare that Bobby Kotick will remain CEO of Activision Blizzard for the time being. However, it appears that Kotick will not be retained once the deal is completed and the transition period to Microsoft has over. Spencer, who was previously the president of Microsoft's gaming division, is now the CEO of Microsoft Gaming, and the Activision Blizzard business will report directly to him, according to the company.
Microsoft's massive Activision Blizzard transaction comes nearly a year after the corporation paid $7.5 billion for Bethesda (ZeniMax Media). That acquisition brought the total number of first-party Xbox game studios to 23, which was considered as a big boost for Xbox Game Pass at the time. The Activision Blizzard merger is now expected to close in fiscal year 2023, according to Microsoft. That's a long time for a deal to finalize, but Activision Blizzard operates in multiple markets, which could complicate Microsoft's regulatory approval process.