Acquisition of Activision Blizzard by Microsoft in the context of "Microsoft"

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⭐ Core Definition: Acquisition of Activision Blizzard by Microsoft

On January 18, 2022, Microsoft announced its intent to acquire Activision Blizzard for $68.7 billion. The acquisition was completed on October 13, 2023, with its total cost amounting to $75.4 billion. Under the terms of the agreement, Microsoft brought Activision Blizzard under its Microsoft Gaming business unit as a sibling division to Xbox Game Studios and ZeniMax Media. With it, Microsoft gained ownership of several franchises under Activision, Blizzard Entertainment, and King, including Call of Duty, Crash Bandicoot, Spyro, Warcraft, StarCraft, Diablo, Overwatch, and Candy Crush. As of 2023, the acquisition is the largest video game acquisition by transaction value in history.

Following shareholder approval of the acquisition, the merger was reviewed by several national anti-trust bodies, with early approvals granted by the European Commission and China's State Administration for Market Regulation (SAMR), among others. The United States' Federal Trade Commission (FTC) and the United Kingdom's Competition and Markets Authority (CMA) issued formal challenges to the acquisition. Sony also criticized the merger, concerned that Microsoft would make the lucrative Call of Duty franchise exclusive to the Xbox platform, though Microsoft committed to non-exclusivity through 2033. The FTC withdrew its request after courts did not find their anti-trust compelling to block the merger, while Microsoft offered to offload its cloud gaming support for Activision Blizzard's games for ten years to Ubisoft to appease the CMA.

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👉 Acquisition of Activision Blizzard by Microsoft in the context of Microsoft

Microsoft Corporation is an American multinational technology conglomerate headquartered in Redmond, Washington. Founded in 1975, the company became influential in the rise of personal computers through software like Windows, and has since expanded to Internet services, cloud computing, artificial intelligence, video gaming, and other fields. Often described as a Big Tech company, Microsoft is the largest software company by revenue, one of the most valuable public companies, and one of the most valuable brands globally.

Microsoft was founded by Bill Gates and Paul Allen to market BASIC interpreters for the Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by Windows. During the 41 years from 1980 to 2021 Microsoft released 9 versions of MS-DOS with a median frequency of 2 years, and 13 versions of Windows with a median frequency of 3 years. The company's 1986 initial public offering (IPO) and subsequent rise in its share price created three billionaires and an estimated 12,000 millionaires among Microsoft employees. Since the 1990s, it has increasingly diversified from the operating system market. Steve Ballmer replaced Gates as CEO in 2000. He oversaw the then-largest of Microsoft's corporate acquisitions in Skype Technologies in 2011, an increased focus on hardware that led to its first in-house PC line, the Surface, in 2012, and the formation of Microsoft Mobile through Nokia. Since Satya Nadella took over as CEO in 2014, the company has changed focus towards cloud computing, as well as its acquisition of LinkedIn for $26.2 billion in 2016. Under Nadella's direction, the company has expanded its video gaming business to support the Xbox brand, establishing the Microsoft Gaming division in 2022 and the acquisition of Activision Blizzard for $68.7 billion in 2023.

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Acquisition of Activision Blizzard by Microsoft in the context of Microsoft Gaming

Microsoft Gaming is the video game and digital entertainment division of the American multinational technology company Microsoft, based in Redmond, Washington and established in 2022. Its five development and publishing labels consist of: Xbox Game Studios, Bethesda Softworks (publisher of ZeniMax Media), Activision, Blizzard Entertainment, and King (the latter three are publishers of Activision Blizzard). It produces the Xbox video game consoles and services, in addition to overseeing production and sales, and is led by CEO Phil Spencer, who has overseen Xbox since 2014.

Prior to 2022, Microsoft had several different video game-related product lines, including Xbox hardware, Xbox operations, and game development studios. Microsoft Gaming was created with the announcement of Microsoft's plans to acquire Activision Blizzard to unify all of Microsoft's gaming groups within a single division. With the completion of the Activision Blizzard acquisition in 2023, Microsoft became one of the largest gaming companies, the third-by revenue and the largest by employment. The company has 500 million monthly active players across all gaming platforms.

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Acquisition of Activision Blizzard by Microsoft in the context of Blizzard Entertainment

Blizzard Entertainment, Inc. is an American video game developer and publisher based in Irvine, California, and a subsidiary of Activision Blizzard. Originally founded in 1991, the company is best known for producing the highly influential massively multiplayer online role-playing game World of Warcraft (2004) as well as the multi million-selling video game franchises Diablo, StarCraft, and Overwatch. The company also operates Battle.net, an online gaming service.

Founded as Silicon & Synapse, Inc. by three graduates of the University of California, Los Angeles: Michael Morhaime, Allen Adham, and Frank Pearce. The company began development of their own software in 1993, with games like Rock n' Roll Racing and The Lost Vikings, and changed its name to Chaos Studios, Inc. the same year, then to Blizzard Entertainment after being acquired by distributor Davidson & Associates in 1994; that year, the company released Warcraft: Orcs & Humans, which would receive numerous sequels and led to the highly popular World of Warcraft. By the end of the decade, Blizzard also found success with the action role-playing game Diablo (1997) and strategy game StarCraft (1998). The company became part of Vivendi Games in 1998, which would then merge with Activision in 2008, culminating in the inclusion of the Blizzard brand name in the title of the resulting holding company; Activision Blizzard became completely independent from Vivendi in 2013. Microsoft acquired Activision Blizzard in 2023, maintaining that the company will continue to operate as a separate business, while part of the larger Microsoft Gaming division; Blizzard Entertainment retains its function as the publisher of games developed by their studios.

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Acquisition of Activision Blizzard by Microsoft in the context of King (company)

King.com Limited is a Swedish video game developer and publisher that specialises in social games. Since 2016, it is one of 3 publishing businesses of Activision Blizzard. Headquartered in Stockholm and London, and incorporated in St. Julian's, Malta, King rose to prominence after releasing the cross-platform title Candy Crush Saga in 2012. It is considered as one of the most financially successful games utilising the freemium model. King was acquired by Activision Blizzard in February 2016 for US$5.9 billion, and operates as its own entity within that company. King is led by Todd Green, who holds the position of President. Gerhard Florin took over Melvyn Morris's role as chairman in November 2014. As of 2017, King employs 2,000 people.

In October 2023, Microsoft acquired parent company Activision Blizzard, maintaining that the company will continue to operate as a separate business. While part of the larger Microsoft Gaming division, King retains its function as the publisher of games developed by themselves.

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