Microsoft to acquire Activision Blizzard, publisher of Call of Duty, Candy Crush for $68.7 billion

In what will be the biggest deal in gaming yet, Microsoft will be acquiring Activision Blizzard for US$68.7 billion. The deal will eclipse what was the largest game acquisition, the $12.7 billion acquisition of Zynga by Take Two Interactive (the GTA guys) which was only announced less than a week ago.

These amounts sound unholy for a Zimbabwean like me whose country is labouring under a $10.5 billion debt. As a casual gamer though, I’ve been tracking the revenues these gaming companies have been making and Microsoft is actually getting a bargain at $68.7 billion.

See, Activision Blizzard also has King studios under its umbrella. These names might not mean much to some but for anyone who casually plays games, there is a high chance you have played at least one game developed by these studios. 

The following franchises are what Microsoft is getting:

For the serious gamer:

• Call of Duty
• World of Warcraft
• Diablo
• Overwatch

For the mobile and light gamer:

• Candy Crush Saga
• Farm Heroes Saga

There are more games, like Crash Bandicoot and the Tony Hawk series that millennials will remember. So Microsoft is getting quite the catalogue.

Analysts say Microsoft is paying a fraction of what they would have paid had Activision Blizzard not been in trouble. The studio has been dealing with a multitude of sexual harrasment lawsuits, on top of the latest Call of Duty game not performing as expected. So, the share price has been rather subdued as the future of the company remained uncertain.

For context, Activision Blizzard has 400 million monthly active players in 190 countries on its games. Not to mention just the value of franchises like WoW and CoD. So yeah, $69.7 billion is a bargain.

Microsoft’s plans

These games will be added to Game Pass and I gotta say, paying the $9.99 per month for Game Pass for PC is starting to look tempting. Imagine Halo, Forza, CoD, WoW, Overwatch etc for 10 bucks a month. 

Game Pass was gaining popularity even before this acquisition and Microsoft recently announced reaching 25 million subscribers. That right there is well over $250 million a month from subscriptions cause some users subscribe for the $15 Game Pass Ultimate.

I foresee a flood of new subscribers and Microsoft is counting on the same. And if we factor in outright game sales Microsoft is looking pretty. See, although Call of Duty: Vanguard did not perform as well as its predecessor, it still managed to be the best selling game of 2021 and it will belong to Microsoft in about 18 months when the deal is expected to be concluded.

What about Sony?

PlayStation fans have the right to be worried. Will Microsoft make the Activision Blizzard titles XBox exclusives? Sony says they expect Microsoft to honour the agreements that are in place. And Microsoft on their part say the games will remain multi-platform but who knows what will happen when current agreements expire. 

Yes, there is money to be made in keeping games multi-platform. Would Microsoft be willing to forgo the millions they would get from PlayStation players? Or would the strategy be to chip away at the ‘exclusives’ advantage Sony has for its PlayStation? We shall see.

Mobile gaming is king now

While the Call of Duty franchise seems like the pick of the litter, Candy Crush might be the most important. 

In 2021, mobile gaming revenue accounted for about half of all gaming revenues. Mobile games brought in about $80 billion whist consoles raked in $45 and PC, $37 billion in revenue. I fully get this as I have become somewhat of a mobile gamer, even more than console or PC. Hence why the ray tracing Samsung chip had me excited.

So those casual games that even our moms play are becoming the big deal. Mock Candy Crush all you want but the game brought in over $1.1 billion in revenue in 2020 on it’s own. That could be 4 times more than the Game Pass subscriber revenue of $250 million we discussed earlier.

So, when it’s all said and done, Candy Crush, Pet Rescue, Bubble Witch and Farm Heroes could be gem that was enclosed in the WoW shell.