Microsoft Corp on Tuesday announced it would buy Activision Blizzard, a video game publisher behind hits like "Call of Duty" and "World of Warcraft," for $68.7 billion in cash.
If the deal goes through, it will mark the largest deal in the sector making the Xbox maker the third-largest gaming company by revenue behind Tencent and Sony.
Microsoft’s offer of $95 per share is at a premium of 45% to Activision’s Friday close. Shares of Activision were up nearly 38% to $65.39 before being halted for news.
"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 Officer Satya Nadella said in a statement.
Demand for video games has surged during the pandemic, as stuck-at-home consumers play more games to keep themselves entertained.
The planned acquisition includes iconic franchises from Activision, Blizzard and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global e-sports activities through Major League Gaming.
Activision's library of games also gives Microsoft's Xbox gaming platform an edge over Sony's Playstation, which has for years enjoyed a more steady stream of exclusive games.
Bobby Kotick will continue to serve as CEO of Activision Blizzard.
Last week, rival videogame publisher Take-Two Interactive Software Inc said it would buy "FarmVille" creator Zynga in a cash-and-stock deal valued at about $12.7 billion, marking one of the biggest industry-wide acquisitions of all time.
