Video games: Microsoft buys Activision Blizzard for nearly $70 billion

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Posted on Jan 18, 2022 at 3:21 PMUpdated on Jan 18, 2022 at 7:26 p.m.

Should we already consider this transaction as the acquisition of the century in the video game industry? In any case, it is already one of the most important ever recorded in the history of entertainment. with that of Fox by Disney in 2017 or that of Time Warner by AT&T in 2016. On Tuesday, Microsoft announced that it would proceed with the acquisition d’Activision Blizzard, one of the most world’s leading video game publishers with 400 million players in 190 countries, for nearly 70 billion dollars. Either the largest acquisition of Microsoft since its creation.

This amount represents an additional premium of 45% compared to the closing price on the stock market Monday evening of the group known for its star franchises such as Call of Duty, Candy Crush or World of Warcraft. In 2013, Vivendi had sold 85% of the capital for 8.2 billion dollars. Which then valued the American publisher nearly 9.6 billion, or nearly seven times less.

4.5 billion players in 2030

But since, the video game sector has continued to grow economically, beating record after record, driven in particular by digitization or more recently by the confinements which have further boosted its consumption. The video game today weighs around 200 billion dollars.

It is also the cultural industry that is recording the strongest growth. According to Microsoft, the planet will have 4.5 billion players in 2030, against 3 billion already today.

“Gaming is the fastest growing and most exciting segment of entertainment across all platforms, and it will play a central role in the development of the metaverse,” writes Microsoft CEO Satya Nadella, referring to these virtual worlds. populated by avatars, one of the “new frontiers” of tech. The operation will also help Microsoft to accelerate on the metaverse, which the group is already deploying in its Teams videoconferencing software. A way for the group to create synergies between its consumer and professional activities.

Become the “Netflix of video games”

But it is primarily in the video game as such that the assets of Activision Blizzard will allow the firm founded by Bill Gates to set foot on the accelerator in the short term. Because with the acquisition of Activision, Microsoft will be able to further expand its catalog of content, get its hands on creative studios and thus boost its Game Pass offer which is today the bridgehead of the Microsoft liner in video games. The reason ? The group led by Satya Nadella aims to become the “Netflix of video games”.

For a monthly subscription, the Game Pass gives access to a portfolio of several hundred games. It now has 25 million paying subscribers worldwide. In this area, Microsoft is now ahead on its historical rival Sony, whose sales of PlayStation home consoles have always outpaced those of the various Xboxes marketed since 2001 by the Redmond group.

“The big maneuvers will continue”

“If Microsoft passes large exclusive licenses, such as Call of Duty or World of Warcraft on the Game Pass, this will put terrible pressure on its rivals, including Sony but also Amazon, Google and all the players who have recently launched platforms. streaming games,” argues Charles Louis Planade, video game financial analyst at TP ICAP.

“The major maneuvers will continue because these actors will have to react. They have the means but they have to act quickly because there are not many large companies left as interesting as an Activision can be. Ubisoft is clearly the next potential target, especially since the price is very low compared to Activision’s valuation multiples,” continues the expert.

On Tuesday evening, the price of the French industry champion closed up almost 12%, pushing its market capitalization to more than 6 billion euros. And in recent months, mega-acquisitions have therefore multiplied in a sector where the content war is in full swing. Eight days ago, Take-Two (GTA franchises, Read Dead Redemption) announced that it got his hands on Zynga, with a check for over $12 billion.

Prior to this, Microsoft had already acquired, in September 2020, Bethesda (licences Doom, The Elder Scrolls, Fallout) for the trifle of 7.5 billion. Which already made it one of the most important mergers and acquisitions operations in the history of the video game sector. This time, the amount will be more than nine times higher… Once its acquisition of Activision is finalized in 2023, Microsoft will become the world’s third largest video game player in terms of turnover, behind the Chinese titan Tencent, which is increasingly present in Europe, and Sony.

Posted on Jan 18, 2022 at 3:21 PMUpdated on Jan 18, 2022 at 7:26 p.m. Should we already consider this transaction as the acquisition of the century in the video game industry? In any case, it is already one of the most important ever recorded in the history of entertainment. with that of Fox by…

Posted on Jan 18, 2022 at 3:21 PMUpdated on Jan 18, 2022 at 7:26 p.m. Should we already consider this transaction as the acquisition of the century in the video game industry? In any case, it is already one of the most important ever recorded in the history of entertainment. with that of Fox by…

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