$MSFT Buying $ATVI for $68.7 Billion Cash

My charts for $ATVI and $MSFT plus a link to the archived Bloomberg article all found here:


The transaction, if it can get regulatory approval, will create the world’s No. 3 global gaming company, catapulting Microsoft to just behind China’s Tencent Holdings Ltd., the publisher of League of Legends, and game console rival Sony Corp., maker of the PlayStation.

Activision couldn’t compete in the new world of gaming on its own, Chief Executive Officer Bobby Kotick said in an interview. “You look at companies like Facebook and Google and Amazon and Apple, and especially companies like Tencent — they’re enormous and we realized that we needed a partner in order to be able to realize the dreams and aspirations we have,” he said. As for Microsoft, “together our ambition is to bring the joy and unity of gaming to everyone on the planet,” Microsoft CEO Satya Nadella told investors on Tuesday.

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Nadella wants his gaming empire to be big enough that gamers will come to it directly, bypassing Apple Inc.’s App Store. Microsoft has been at war with Apple, and Alphabet Inc.’s Google, over the fees the app stores charge for games. “Today, we face strong global competition from companies that generate more revenue from game distribution than we do from our share of games sales and subscriptions,” Nadella said on a call with investors. “We need more innovation and investment in content creation and fewer constraints on distribution.” Or, as Spencer said when talking about mobile-phone gaming, “Distribution on those devices are controlled by two people, two big companies.” So Microsoft wants its own “unfettered” ability to distribute games and content, Spencer said.


Nadella’s corporate strategy has been coalescing around cloud, content and creators. Microsoft wants to get as much of Activision’s past and future content onto its cloud gaming service, Xbox Game Pass, which has been bolstering the software maker’s sales with a steady stream of subscription revenue. The deal also lets Microsoft tap into a pool of players creating their own gaming content and worlds. After adding Minecraft, LinkedIn and GitHub, Nadella has been shopping for a big asset that would give him another large community of creators. He failed to land social video service TikTok, and talks with Pinterest Inc. and Discord Inc. similarly went nowhere. Activision is the latest try, and this time he looks to have succeeded.