Buying Activision Blizzard Is a Metaverse Play by Microsoft

This morning, Microsoft announced it's acquiring gaming giant Activision Blizzard for $68.7 billion. The deal is aimed at boosting two major aspects of the tech giant's business: growing subscriptions to build greater dominance for its Xbox gaming system and being viewed as a serious player in the development of the metaverse. The purchase of the scandal-plagued gaming publisher of Call of Duty and World of Warcraft is an all-cash transaction. The acquisition is expected to expand many facets of Microsoft’s gaming business including mobile, PC, console and cloud. According to Microsoft, the deal makes it the world's third-largest gaming company by revenue. Activision Blizzard CEO Bobby Kotick will continue in his role. Once the deal is finalized, he will report to Microsoft Gaming CEO Phil Spencer. The Future of eSports: Bridging Fashion, Gaming, Entertainment—and Legacy Pro Sports “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,” said Satya Nadella, chairman and CEO of Microsoft, in a statement. “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.” Activision Blizzard has cultivated a deep roster of gaming franchises besides its two banner titles including Diablo, Overwatch and Candy Crush. In November, Activision Blizzard posted net revenues of $2.07 billion for Q3 2021, a noteworthy gain from $1.95 billion YoY. “For more than 30 years, our incredibly talented teams have created some of the most successful games,” said Kotick. “The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.” Microsoft is acquiring Activision Blizzard at a time when the gaming giant has come under fire for its workplace culture, including allegations of sexual harassment and workplace misconduct. Since July, 37 employees have been fired or forced to quit the company, and 44 have been disciplined, according to The Wall Street Journal. Last spring, Fernando Machado left his role as global chief marketing officer at Restaurant Brands International to join Activision Blizzard as the company's top marketer. Growth in esports The news comes as esports continues to merge with mainstream culture. Last year, Coca-Cola’s first new global platform since 2016, titled “Real Magic,” featured a two-minute ad set amid an esports tournament. “This is the future of entertainment,” Kristin Connelly, vp of global brand marketing at Activision Blizzard Esports, said during Adweek's sports marketing summit last November. ESports Group Evil Geniuses Plots Branding Evolution Under New Global Marketing Head Krystal Hauserman