Microsoft buys Activision Blizzard

In 1979, a group of disgruntled Atari employees decided to resign and set up their own company. Activision was the world's first third-party game developer, producing and publishing titles for other companies' platforms.

The company now known as Activision Blizzard was bought by one of the industry's leading platform owners, Microsoft, for 68,7 billion dollars – the biggest sale in the history of the video game industry.

This sale is also enormous in terms of the game franchises Microsoft now controls. It now owns franchises such as Call of Duty, Diablo, Starcraft, Candy Crush and World of Warcraft.

Big money is nothing new in the video game industry. Activision Blizzard itself became one of the biggest video game companies in 2008, when Activision merged with Blizzard in a deal worth 18,9 billion dollars. Microsoft and Sony regularly buy successful existing studios to take control of their IP and make their games exclusive to their platforms.

But Microsoft has become particularly aggressive in its approach. Over the past decade, it has made a series of acquisitions, including the developer of Minecraft in 2014 for 2,5 billion dollars and the publisher of Elder Scrolls and Doom in 2020 for 7,5 billion dollars. With its acquisition of Activision Blizzard, Microsoft is now the third-largest company in the industry, behind TenCent and Sony.

All of this is part of Microsoft's video game business strategy, which is less about selling gaming products and more about increasing subscriptions to its Game Pass service. Much like services such as Netflix and Spotify, Game Pass gives subscribers access to a vast digital catalogue of games in exchange for a monthly fee.

In its announcement of the Activision Blizzard purchase, Microsoft also boasted that Game Pass had surpassed 25 million users. With each user paying 16 $ a month, that amounts to around 400 million $) in monthly revenue. With Activision Blizzard, Microsoft now owns a vast new range of franchises it can offer through Game Pass, attracting even more users.