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Microsoft buys the creator of 'Call of Duty' and 'Candy Crush' for 60,000 million

Activision Blizzard booth at an international video game congress in Shanghai, China, in August 2020 .ALEX PLAVEVSKI (EFE)

The giant Microsoft has reached an agreement to take over Activision Blizzard, the publisher and developer of such popular video games as Call of Duty and Candy Crush, for 68.7 billion dollars ( 60,320 million euros), as reported on Tuesday by the technology company in a statement. This is the largest operation in the 46-year history of the manufacturer of software.

Microsoft has presented the operation as a “big bet on the metaverse”, which opens a new window that seeks to merge the world online traditional with virtual and augmented reality, moving towards a new generation on the internet. The operation also represents a challenge to the regulatory attempts of the authorities to limit the absolute power of the big technology companies, in which Democrats and Republicans go hand in hand. “Games are the most dynamic and exciting category of entertainment on all platforms today and will play a key role in the development of metaverse platforms,” ​​said Satya Nadella, CEO of Microsoft.

One of the three most valuable companies in the world will pay 95 dollars for each of Activision Blizzard's shares, which represents a premium of 46 % with respect to the price at which they closed this Monday. Shares of Microsoft fell 1% after the announcement of the acquisition, while those of Activision rose around 40% in pre-opening trading on Wall Street. At mid-session, the video game firm was up 27% and the tech giant down 2%. Microsoft, a company led by Satya Nadella, has stressed that after closing the deal it will become the third largest video game company in the world by level of income, only behind Tencent and Sony, reports Reuters.

This deal far exceeds Take-Two's purchase of Zynga, announced last week. That operation, of 12,700 million dollars (11,150 million euros) was the largest acquisition in the video game industry. In a matter of days, that record has been broken. It is not Microsoft's first corporate foray into the sector: in 2020 it already acquired ZeniMax Media, the parent company of Bethesda Softworks, one of the largest private video game developers and publishers in the world, for 7.5 billion dollars (6.585 million euros).

In addition to its main flagship products, Call of Duty and Candy Crush, Activision Blizzard has released the popular video game sagas Warcraft, Diablo and Overwatch. The company has a workforce of about 10,000 employees and in 2020 it had a turnover of 8,086 million dollars (7,100 million euros) and achieved profits of 2,197 million dollars (1,929 million euros).

However, Activision also has its shadows. The firm has been in the eye of the hurricane for months due to complaints of a climate of systematic sexual harassment of company employees. The firm's CEO, Bobby Kotick, would have been aware of this toxic climate for years without reporting it to the board of directors. In fact, after uncovering the scandal in an investigation by The Wall Street Journal, the Department of Good Labor Practices of the The state of California sued Activision in July for underpaying and discriminating against its female employees, as well as a “workplace culture of sexual harassment.” Since then, the company's shares have lost almost half their value, from the 100 dollars per share that they reached in February. After the acquisition, the video game company will report directly to Phil Spencer, CEO of that division at Microsoft.

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The scandal around the work environment has already taken its toll on a company struggling to adapt to the end of a phase in which video game consumption was fueled by mobility restrictions imposed by the pandemic. In November, Activision delayed the release of two long-awaited games and advanced a fourth-quarter sales forecast that was below Wall Street expectations. Kotick, who has led the company for three decades, remained under pressure from employees who were urging him to resign over his role in the scandal. The manager apologized and promised to make changes and will now maintain his position after the purchase by Microsoft, although subordinate to Spencer.

Microsoft hopes to incorporate the Activision catalog into its subscription Game Pass, which recently reached the figure of 25 million subscribers. Activision will contribute its almost 400 million monthly users. Adding Activision's portfolio of popular titles will allow Microsoft to expand its own offering for the Xbox console and better compete with rival Sony's PlayStation. Most of Activision's games were already published on Xbox consoles. After the operation is completed -the closing is scheduled for this year, after receiving the approval of the regulators-, the company that owns Xbox will have 30 internal video game development studios.

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