Candy, crushed… Yesterday Microsoft announced plans to buy Activision Blizzard, which makes hits like World of Warcraft and Candy Crush, for about $70B — the largest all-cash acquisition in corporate history. For reference: Previously Microsoft’s biggest deal was its $26B LinkedIn purchase. Shares of Activision spiked 26% yesterday, after slipping 27% since California regulators sued the company over employee harassment in July.

  • Microsoft’s gaming biz is now the third largest in the world after Tencent’s and Sony’s. Microsoft’s existing gaming biz (think: Xbox, Minecraft) brought in $15B last year, and its Xbox Game Pass monthly subscription now has 25M subscribers.
  • Antitrust scrutiny is expected, but Microsoft is reportedly so confident the deal will close, it’s agreed to pay a $3B cancellation fee if it falls through.

When it games, it pours… Sales across the gaming industry boomed 27% during lockdown in 2020 and continued growing last year. Gaming revenues are forecast to jump from $180B in 2021 to $220B by 2024. And as gaming companies reach new sales levels, there’s been a flurry of consolidation: There were $117B worth of gaming acquisitions last year, and Grand Theft Auto maker Take-Two agreed to buy FarmVille creator Zynga last week for $12.7B.


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