"Historic moment! Microsoft's acquisition of Activision Blizzard", "God closed the door of Blizzard, but opened a windows for him", I believe that on the evening of January 18, many players' game groups were swept away by such a news. As early as overseas media reported that Microsoft would buy Activision Blizzard for nearly $70 billion, which will also be Microsoft's largest acquisition to date, and the deal may be announced as soon as Tuesday local time.
However, just less than an hour later, Microsoft officially issued a statement saying that it would acquire Activision Blizzard in an all-cash manner of $95 per share, including the latter's net cash, with a transaction value of $68.7 billion. In addition to a 45% premium to the pre-announcement share price, the Activision Blizzard management team, represented by current CEO Bobby Kotick, will also remain in office and report to Phil Spencer, head of Microsoft's gaming division.
After the completion of this acquisition, Microsoft will become the world's third largest game manufacturer after Tencent and Sony. And Xbox official micro on the social platform said, "Today is a very historic moment. We are excited to share with you that the world-famous Activision Blizzard is about to join the Xbox family! ”
You know, Phil Spencer said in an email to employees last November that the Xbox leadership team was "troubled and disturbed by the terrible events and behaviors that occurred inside Activision Blizzard" and "is evaluating the relationship with Activision Blizzard." When we thought of the "reassessment" as reducing collaboration and keeping distance, it turned out that what it really meant was to prepare to buy the company.
With the largest acquisition in the game industry in history and an all-cash deal of $68.7 billion (about 436.3 billion yuan), it's no wonder that almost everyone from players to the industry to the capital markets is amazed. As of Tuesday's close in local time, Activision Blizzard's share price rose 32% intraday and closed up 25.88%, while Sony, Microsoft's old rival, fell 9.6% in the Japanese stock market, the biggest decline since March 2020.
What is the level of $68.7 billion in cash? To know that Microsoft's profit in 2021 is 61.2 billion US dollars, which is equivalent to spending more than a year of profits to strengthen the strength of the game sector; the market value of Sony Group (not SIE) is 143.6 billion US dollars, which is equivalent to Activision Blizzard in Microsoft's eyes, almost equal to half of Sony; last year, the output value of China's game industry was 300 billion yuan, and 68.7 billion US dollars was equivalent to the revenue of domestic game manufacturers for one and a half years.
Without a word, this series of figures proves that such a sum of money in the game industry is absolutely astronomical. Even Sony's whether it has made $68.7 billion from its involvement in the game business to today may be a problem, after all, SIE's profitability in the entire PS4 era is only $8.6 billion.
Of course, buying Activision Blizzard with $68.7 billion in cash is neither expensive nor expensive for Microsoft. The deal is expensive because the $68.7 billion all-cash deal is sky-high. Even in January 2021, Microsoft still had $136 billion in cash on its balance sheet, but after announcing a new stock buyback program of up to $60 billion in September of the same year, even though it issued corporate bonds last year, it is obviously bold to come up with $68.7 billion in one go.
It is not expensive, because activision Blizzard's internal turmoil this year, so that its stock price in 2021 shrunk by 40%, even if you count the 45% premium given by Microsoft, it can be called a low point, not to mention Activision Blizzard's books, there are nearly 8.7 billion US dollars in cash and cash equivalents. In addition, Activision Blizzard is also the world's largest third-party game publisher, after owning Activision Blizzard, Microsoft also has a whole industry chain from mobile phones to PCs to game consoles.
Besides, Activision Blizzard's own IP and development team are obviously quite valuable, so the so-called "Microsoft spent 68.7 billion to buy an empty shell of Blizzard" is obviously only a more one-sided view of some players.
After all, in the development process of China's game industry, Blizzard Entertainment has also played a very important role, even if leaving aside the enlightenment games of many players "StarCraft", "Diablo", "Warcraft 3", the success of "World of Warcraft" has made the terminal game manufacturers proud of "benchmarking World of Warcraft", and in the era of mobile games, dominating the early domestic mobile game industry card play leader "My name is MT", "Dota Legend" are also Blizzard's IP, not to mention "DOTA" This MOBA game is derived from Blizzard's map editor. So in a sense, Blizzard Entertainment is almost the youth of the post-85 and pre-95 generations.
However, hands-on Blizzard and Blizzard Entertainment cannot wait to see it. Activision Blizzard is composed of Activision Publishing Company, Blizzard Entertainment Company and KingDigital (hereinafter referred to as "King"), Activision's "Call of Duty (COD)" series is the first IP of FPS games, is the third best-selling game series in the history of games, can sell more than 20 million copies per year, known as "The Gunfight Dream of 300 Million Controllers in Europe and America" and "North American CF".
Among other things, the future COD series into Microsoft's XGP is obviously a sure thing. Even if Microsoft does not engage in the "PS exclusive" operation, free to play on Xbox, on PS costs $59 treatment, how players will choose naturally need not to say more. So it's no wonder that some console players have started shouting again, "Sony has lost its breath."
As for King, although compared to Activision and Blizzard, domestic players may not be familiar with it, but the mobile game manufacturer's "Candy Crush Legend" is a casual game that has swept the world, and even from 2012 to the present, it has been enduring, and it is still one of the world's top ten most profitable mobile games. And of Activision Blizzard's 400 million monthly active users worldwide, King brings in 60% of its active users.
In fact, Blizzard Entertainment, which represents PC games, is more like a addition to this transaction. After all, the internal scandals of Activision Blizzard in the past year have mainly focused on Blizzard Entertainment, and Blizzard's games can be said to have behaved like "crooked dates" so far. For example, World of Warcraft has entered the end of its life cycle, Overwatch and the OWL League have ceased to be brilliant, Diablo 4 and Diablo: Immortal have been delayed, and Warcraft 3 Remake, StarCraft, and Heroes of the Storm have long been "cool".
As for why Microsoft spent so much money on Hands-on Blizzard, That's what Microsoft Chairman and CEO Satya Nadella said on an investor conference call in the early hours of January 18. "Gaming is the most dynamic and exciting area of all-platform entertainment today, and will also play a key role in the development of metaverseal platforms, and Microsoft is trying to create a 'river of entertainment' that allows "content and commerce to flow freely and drive the renaissance of games" to make games more inclusive and accessible to everyone.
In fact, Microsoft's intention is not difficult to guess, through XGP as a connection, so that players can be in the PC and XBOX representative of the home terminal, to the mobile phone and tablet representative of the mobile end, with a gamepad can enjoy all the games anytime, anywhere. According to information released by Microsoft, XGP now has 25 million users. However, there are about 3 billion gamers worldwide, which means that XGP's penetration rate is currently only eight per thousand.
In the case that Microsoft has financial advantages, strong technology, reliable publicity and promotion, and its own game console platform, the only thing missing is high-quality content. The acquisition of Bethesda and Activision Blizzard also means that the lack of first-party games in the XGP content library is being filled.
The problem facing XGP today is that third-party manufacturers still have a cautious wait-and-see attitude towards this model, and at this stage, the game landing of third-party manufacturers in XGP is basically time-limited exclusive. This is because third-party manufacturers have no consensus on the subscription system represented by XGP, and game manufacturers have their own views on whether it is the future of the industry or the poison that buries third parties. Since it can't buy a product, Microsoft can only directly use the money ability to buy game manufacturers.
You may wish to imagine that Bethesda + Activision Blizzard + Microsoft's existing first-party games, coupled with the EA that has joined XGP, is equivalent to saying that Microsoft now has a "car gun ball" and an American RPG in its hands. For an average player, XGP will be able to fully meet his basic needs in the future, which is naturally a great temptation for non-core players. Sony's PS, in turn, has become "all games are not assembled here", and after PS's exclusive game excludes the first party, it is almost only "Original God".
If XGP is the present, xCloud cloud games are the focus of the next 3-5 years, then the metaverse as a possible trend in the future, Microsoft obviously will not miss, so Microsoft's acquisition of Activision Blizzard is not only in the game field to continue to increase the size, but also in the metaverse of this outlet layout. You know, the game industry should be said to be the best landing scene in the metaverse, Blizzard's Warcraft, interstellar, dark IP after decades of development, has long established a huge world view, and even Microsoft in the investor conference call, also bluntly showed great interest in warcraft IP.
And Microsoft is currently a number of platform companies, the only one with both software and hardware manufacturers, Tencent although there is content, but there is no entrance, while Meta, Google and Apple have an entrance, but no content. If you want to say who is the first to take the lead in realizing the prototype of the meta-universe, then Microsoft, which has AR headset HoloLens, Azure cloud services, Activision Blizzard and Bethesda, and a group of loyal players, is not the one with the biggest hope?
From Microsoft's acquisition of Bethesda, to Take-Two's acquisition of social game giant Zynga, to ByteDance and Tencent's "crazy attack" in the past year, the game industry has ushered in a round of reshuffle after the Atari crash. In this round of acquisition wave, Take-Two is the purest, because it is simply to enter the mobile game track, Tencent and ByteDance are mutually injurious, in order to collect game research and development capabilities, and Microsoft's intention is perhaps the biggest, what it wants to achieve is to allow players to use a gamepad to play mobile phones, PCs, game consoles, and by the way, to block Amazon, Google, Apple, Meta into the pace of the game industry.
In fact, the game as a cash cow, large-scale integration on a global scale is not the first time, but this round of mergers and acquisitions are basically mutual mergers and acquisitions in the industry, and its core feature is "vertical integration", Tencent began to do 3A, Take-Two aimed at mobile games, and then Microsoft chose "I want it all", each of them is emphasizing to make up for their own weaknesses, enrich product lines, and emphasize the ability to serve users across platforms.
When Microsoft opens the "golden dollar" model, perhaps in the next year, we can see 38 billion US dollars of EA, 15 billion US dollars of Nexon and Bandai Namco, 7 billion using Ubisoft, 4.9 billion US dollars of Capcom, one or more of them, being acquired or merged.
Finally, as a veteran player of Blizzard's games, after watching Blizzard go around for 27 years, from Devinson United to Snow Mountain, to Saint-Dat and Havas Group, and then to Vivendi, and then redeemed as Activision Blizzard, and finally ushered in the new owner Microsoft. Now after a turbulent and displaced half life, I have found a good home, which can also be regarded as happy ending.