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Putting Microsoft's Acquisition of Activision-Blizzard into Perspective
24/01/2022
If I earned $100 a day it would take me 27.3 years to accumulate a million dollars. However, if I
earned the same amount of money each day it would take me 27,397 years to make a billion
dollars. That is how astronomical and unfathomably large the sum of a billion is. This clearly
doesn't concern Microsoft though as they've just forked out a whopping $68 billion to absorb
Activision-Blizzard. Whether or not it's a wise business transaction will remain to be seen but
given how absurdly expensive the purchase was, I thought it might be fun to try and put it into
perspective.
First of all, it is already the 3rd largest business transaction this decade and there have only
been 29 more expensive purchases in human history. It also makes it the 5th most lucrative
deal in media history too, only bettered by the following:
America Online Inc. acquires Time Warner Inc for $112 billion in 2000.
AT&T Inc. acquires Time Warner Inc for $101 billion in 2016.
Charter Communications Inc. acquires Time Warner Cable Inc for $87.4 billion in 2015
Walt Disney Co. to acquire Twenty-First Century Fox Inc (Entertainment Businesses) for $84.8
billion in 2014
Just below these mammoth mergers sits Microsoft and their latest venture.
Take-Two Interactive buying Zynga for $12.7 billion earlier this year. In fact, Microsoft accounts
for 3 out of the top 10 most expensive video game acquisitions with a combined score of $79.5
billion when taking into consideration their previous investments for ZeniMax Media and Mojang
costing them $8.1 and $2.5 billion respectively. Other high profile mergers include Tencent
acquiring Supercell for $8.6 billion in 2016 and Activision Blizzard acquiring King for $5.9 Billion
in 2015, which of course Microsoft now own.
Now there's no implication here that Microsoft isn't getting their bang for their buck as Activision
gaming franchises. As such, they now have domain over Infinity Ward, Sledgehammer Games,
Toys for Bob, Treyarch, and Vicarious Visions as well as franchises such as Call of Duty, Crash
Bandicoot, Diablo, Hearthstone, Overwatch, the Warcraft series and Candy Crush Saga just to
name a few. But, consider what other properties competing companies have managed to
purchase for much less money. Disney bought Marvel and Star Wars for $4 billion apiece as
well as Pixar for $7 billion and the control over Hulu for $10.5 billion. It's mind-blowing to think
that Microsoft has paid more money for Activision Blizzard than the Marvel Cinematic Universe
has generated in revenue across its 27 films ($25.3 billion) and every Star Wars film ever
released ($10.3 billion) COMBINED.
such a crazy sum of money and it really typifies just how huge and influential the video game
market has become. It will be interesting to monitor exactly what Microsoft decides to do with its
new licenses, their decisions over exclusively and whether Sony feel pressured to make some
deal themselves. It seems unlikely though as they don't really need to and their biggest
transaction was the acquisition of Columbia Pictures Entertainment for $3.4 billion all the way
back in 1989 which indicates that this behavior isn't really their business model. Either way, your
move Sony!
Joe Wilcock