Microsoft paid $68.7 billion to buy Activision Blizzard in October 2023

Microsoft completed its purchase of Activision Blizzard for $68.7 billion on October 13, 2023. This was the largest video game industry acquisition ever made. The deal gave Microsoft ownership of franchises like Call of Duty, World of Warcraft, Diablo, Overwatch, Candy Crush, and Blizzard Entertainment's entire game library.

The price per share was $95, which Microsoft had agreed to pay back in January 2022. The deal took nearly two years to close because regulators in the United States, United Kingdom, and other countries investigated whether it would reduce competition in the gaming market. Microsoft had to make concessions — particularly around Call of Duty licensing — before regulators approved it.

Key Takeaways

  • Microsoft paid $68.7 billion in cash to acquire Activision Blizzard, making it the largest gaming industry deal on record.
  • The acquisition took 21 months to close because the Federal Trade Commission, UK Competition and Markets Authority, and other regulators examined whether it would harm competition.
  • Microsoft agreed to license Call of Duty to competitors like Sony and Nintendo for 10 years to satisfy regulatory concerns.
  • The deal gave Microsoft ownership of major franchises including World of Warcraft, Diablo, Overwatch, and Candy Crush, significantly expanding its gaming portfolio.

Why the deal took so long to close

When Microsoft announced the acquisition in January 2022, the company expected approval within a year. Instead, regulators raised concerns that Microsoft would use its size and resources to dominate the gaming market, particularly in console gaming where Xbox competes with PlayStation and Nintendo Switch.

The Federal Trade Commission (FTC) filed a lawsuit in December 2022 to block the deal. The UK's Competition and Markets Authority (CMA) also investigated intensively. Both agencies worried that Microsoft would make Call of Duty exclusive to Xbox or give it preferential treatment, which would hurt Sony's PlayStation business.

Microsoft addressed these concerns by committing to keep Call of Duty on PlayStation, Nintendo, and Steam for at least 10 years after the deal closed. It also agreed not to make other Activision games exclusive to Xbox without regulatory approval. These commitments convinced regulators to allow the purchase to proceed.

What Microsoft got for $68.7 billion

The acquisition included Activision Blizzard's entire portfolio of games and intellectual property. The most valuable piece was Call of Duty, one of the highest-grossing video game franchises ever, which generates billions in revenue annually across console, PC, and mobile platforms.

Microsoft also gained World of Warcraft, a massively multiplayer online game that has operated continuously since 2004 and still has millions of active players. The company acquired Diablo and Overwatch, two major competitive gaming franchises, along with Candy Crush, which generates substantial revenue from mobile players.

Beyond individual games, Microsoft gained Activision Blizzard's development studios, esports infrastructure, and player communities. The company also inherited Activision's workplace challenges — the company had faced multiple lawsuits and investigations related to workplace misconduct and discrimination before the acquisition.

How this deal compared to other major tech acquisitions

At $68.7 billion, the Activision Blizzard deal was larger than most major tech acquisitions. Microsoft's previous largest deal was buying LinkedIn for $26.2 billion in 2016. Facebook (now Meta) paid $19 billion for WhatsApp in 2014. Google paid $12.5 billion for Motorola's mobile division in 2011.

Within the gaming industry specifically, the Activision deal dwarfed previous records. Microsoft's earlier purchase of ZeniMax Media (which owned Bethesda and The Elder Scrolls) for $7.5 billion in 2020 was the previous gaming industry record. Sony's acquisition of Bungie for $3.6 billion in 2022 was significant but much smaller.

What changed for players after the deal closed

For most players, the immediate changes were minimal. Call of Duty continued releasing on PlayStation and other platforms as promised. World of Warcraft remained available on PC. Overwatch 2 stayed free-to-play on console and PC. Candy Crush continued on mobile devices.

The larger shift was strategic: Microsoft integrated Activision Blizzard games into Xbox Game Pass, its subscription service that costs $11.99 per month for console access or $9.99 for PC access. This meant Game Pass subscribers could play Call of Duty, World of Warcraft, Diablo, and other Activision titles without buying them separately. For players who already subscribed, this significantly expanded the library available to them.

Microsoft also began consolidating Activision's operations under Xbox leadership. The company closed some Activision offices and reorganized teams, though it maintained separate development studios for major franchises.

Why Microsoft wanted this deal

Microsoft's gaming strategy centers on Game Pass — a subscription model similar to Netflix for games. The company wanted major franchises to drive subscriptions and keep players in the Xbox ecosystem. Call of Duty's massive player base and annual release cycle made it an especially valuable addition.

The deal also addressed a strategic gap: Microsoft had fewer exclusive mobile games than competitors. Candy Crush, one of the world's most-played mobile games, filled that gap. World of Warcraft and Diablo gave Microsoft established communities of dedicated players who might subscribe to Game Pass to access these games on new platforms or devices.

For Microsoft, the $68.7 billion price reflected confidence that integrating Activision's franchises into Game Pass would generate enough subscription revenue to justify the investment over time.

Frequently Asked Questions

Did the deal make Call of Duty exclusive to Xbox?

No. Microsoft committed to keeping Call of Duty on PlayStation, Nintendo Switch, and Steam for at least 10 years. This commitment was required by regulators before they approved the deal. Call of Duty continues releasing on all major platforms.

Can I play Activision games on Xbox Game Pass now?

Yes. After the deal closed, Microsoft added Call of Duty, World of Warcraft, Diablo, Overwatch, and other Activision titles to Game Pass. The availability varies by platform — some games are on console Game Pass, others on PC Game Pass, and some on both.

Why did regulators worry about this deal?

Regulators were concerned Microsoft would use its size to make Call of Duty exclusive to Xbox or give it preferential treatment, which would hurt PlayStation's competitiveness. Microsoft's commitment to keep Call of Duty on competing platforms for 10 years addressed this concern.

Was $68.7 billion a fair price?

That depends on how much revenue Activision generates for Microsoft over time. The price reflected Activision's franchises, player communities, and development talent. Whether it was "fair" will only become clear years later when Microsoft's financial results show whether Game Pass subscriptions and game sales justified the investment.

Did anything happen to Activision employees after the acquisition?

Microsoft laid off about 10,000 Activision employees in early 2023, representing roughly 8 percent of the combined workforce. The company cited changing market conditions. Some Activision studios and teams were consolidated or reorganized under Xbox leadership, though major franchises retained their separate development teams.