Microsoft Acquires Activision Blizzard: Beating Sony in Gaming and the Metaverse

In January 2022, Microsoft Corporation (Microsoft) announced the acquisition of Activision Blizzard, Inc. (Activision) for US$68.7 billion. With a growing franchise of games, and with Microsoft’s apparent ambitions for the games console market, Activision was an attractive acquisition target. Activision owned some of the most popular games in the world and had a $54 billion market value in 2020. The acquisition would also take Microsoft a step closer to expansion into the metaverse, where—along with the cloud gaming and video game software industries—it hoped to gain an edge. However, gaming was a small part of Microsoft’s business. So why had Microsoft pursued the acquisition? What advantages did Microsoft see in it? And what would the move mean for Sony Interactive Entertainment (Sony), the market leader in the video games industry? Finally, how should Microsoft address the allegations of harassment and other employee complaints that had arisen at Activision and set right the environmental, social, and governance (ESG) issues that had arisen at Activision?