Microsoft Makes Shock $69 Billion Acquisition to Move into the Metaverse

January 20, 2022, 2:00 PM AEST - 3 months ago

Microsoft is making a massive move on Activision Blizzard, intending to spend an astronomical US$69 billion to acquire the gaming giant in an apparent escalation of its metaverse plans.

Deal Will Make Microsoft World’s #3 Gaming Company in Revenue Terms

The software behemoth will buy Activision Blizzard for US$95 per share at a valuation of US$68.7 billion. The deal, set to close in the 2023 fiscal year, will make Microsoft the world’s third-largest gaming company in revenue terms behind Riot Games owner Tencent and PlayStation developer Sony.

To frame the deal in another way, as Twitter user @CroissantEth succinctly put it, that US$69 billion purchase price amounts to three times the total market capitalisation of all existing metaverse tokens:

Xbox Game Pass Set to Xplode

Activision Blizzard has a long list of gaming franchises that includes Call of Duty, Overwatch, Candy Crush, World of Warcraft and Tony Hawk’s Pro Skater. On conclusion of the deal, its formidable catalogue is set to be added to Microsoft Xbox’s Game Pass service, which already has 25 million subscribers.

According to Microsoft chairman and CEO Satya Nadella, the deal will provide “building blocks for the metaverse”, adding that “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”.

Meanwhile, ‘Mesh’ is Coming

In November 2021, Nadella foreshadowed Microsoft’s metaverse plans with the “Mesh” upgrade to its Teams service, which involves personalised digital avatars and immersive spaces in the metaverse, due later this year.

Microsoft’s latest move also comes as no surprise after Facebook rebranded itself as Meta a month earlier, heralding its own foray into the metaverse. Interestingly, The Wall Street Journal reported last week that 100 employees from Microsoft’s augmented reality team have departed over the past year to join Meta.

US retail giant Walmart also signalled its intentions to enter the space this week by announcing its plans to make and sell virtual goods.

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