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Microsoft bids for games giant Activision Blizzard, maker of Call of Duty, in a bet on the ‘metaverse’

Offer of $95 per share represents a premium of 45pc to Activision's Friday close

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Call Of Duty is one of the world's most-played games. Photo: Troy Harvey/Bloomberg

Call Of Duty is one of the world's most-played games. Photo: Troy Harvey/Bloomberg

Call Of Duty is one of the world's most-played games. Photo: Troy Harvey/Bloomberg

Microsoft is buying Call of Duty maker Activision Blizzard for $68.7bn (€60bn) in the biggest gaming industry deal in history as global technology giants stake their claims to a virtual future.

The all-cash deal announced by Microsoft yesterday, its biggest-ever acquisition, will bolster its firepower in the booming videogaming market where it takes on leaders Tencent and Sony.

It also represents the American multinational’s bet on the “metaverse”, virtual online worlds where people can work, play and socialise, as many of its biggest competitors are already doing.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” Microsoft chief executive Satya Nadella said.

Microsoft’s offer of $95 per share represents a premium of 45pc to Activision’s Friday close. Its shares were up 27pc at $83.35 in early trading, still a steep discount to the offer price, reflecting concerns the deal could get stuck in regulators’ crosshairs.

Microsoft has so far avoided the type of scrutiny faced by Google and Facebook but this deal, which would make it the world’s third largest gaming company, will put them on lawmakers’ radars said Andre Barlow of the law firm Doyle, Barlow & Mazard.

“Microsoft is already big in gaming,” he said.

The tech major’s shares were down 0.7pc in early trading.

The deal comes at a time of weakness for Activision, maker of games such as Overwatch and Candy Crush.

Before the deal was announced, its shares had slumped more than 37pc since reaching a record high last year, hit by allegations of sexual harassment of employees and misconduct by several top managers. The company is still addressing those allegations and said on Monday it had fired or pushed out more than three dozen employees and disciplined another 40 since July.

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CEO Bobby Kotick, who said Microsoft reached out to him for a possible buyout, would continue to be the CEO of Activision following the deal.
In a conference call with analysts, Microsoft boss Mr Nadella did not directly refer to the scandal but talked about the importance of culture in the company.

“It’s critical for Activision Blizzard to drive forward on its renewed cultural commitments,” he said.


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