So today’s announcement, that Xbox has just bought Activision Blizzard for a staggeringly high $68.7 billion, comes as both an immense surprise, and a totally logical move. On the surface, Activision Blizzard is an extremely valuable company, with gigantic gaming properties like Call of Duty, Warcraft, Overwatch, and Diablo all coming under its brand, so the notion that Xbox would want to acquire the publisher makes complete sense. On the other hand, the controversy surrounding Activision Blizzard is so volatile right now, that Xbox may have just taken a huge risk, and an expensive one at that.
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How Xbox-Activison Blizzard’s $70 Billion Acquisition Compares to Other Buyouts
70 billion US dollars is an inconceivable amount of money, at least for most people. This acquisition is the largest company buyout in the gaming industry so far. While it may not compare to the likes of Hollywood or Silicon Valley, with buyouts in the $300 billion range being common occurrence, Xbox’s acquisition of Activision Blizzard creates a new precedent in the video game landscape, setting the bar for all future company acquisitions.
To understand the sheer scale of this buyout, it’s important to look to other recent acquisitions in the gaming world. What better place to start than the very recent acquisition of Zynga, by Take-Two Interactive.
Taking place only a week ago, Take-Two’s acquisition of Zynga cost $12.7 billion, and had the record for the most expensive buyout in the gaming industry until today. Below that, comes Tencent’s acquisition of Supercell, taking place in 2016 and costing the company $8.6 billion.
At the lower end of the scale, Bandai’s acquisition of Namco all the way back in 2005 cost $1.7 billion, which when adjusted for inflation calculates to around $2.3 billion today. In the middle of the pile comes Facebook’s acquisition of Oculus VR for $2 billion in 2014.
Of course, Xbox is no stranger to acquiring fellow video game studios. The company made, at the time, a record-breaking $8.1 billion deal to acquire ZeniMax Media in 2020, which landed it the rights to all of Bethesda’s titles, including the upcoming Starfield, which has been confirmed to be Xbox-exclusive upon launch.
Activision Blizzard themselves have done some acquiring over the years, with its buyout of mobile developer King in 2015, costing $5.9 billion. With King being included in the Xbox-Activision Blizzard deal, the astronomical price tag makes a little more sense.
To compare Xbox directly with its competition, Sony has also spent a lot of time and resources vacuuming up individual development studios. While the exact figures are not often available to the public, acquiring the vast number of developers that Sony has over the last few years is sure to have made a sizable dent in its spacious wallet.
One of the few confirmed prices for a Sony acquisition is its 2019 buyout of Insomniac Games, which apparently cost the company $229 million. And with six developer buyouts from Sony, including Returnal’s Housemarque, Demon’s Souls Remake’s Bluepoint, and Valkyrie Entertainment, Sony is clearly on their own crusade of acquirement.
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How The Size of The Acquisition Compares to Other Buyouts
While this buyout’s immediate talking point is its simply enormous price tag, it shouldn’t be forgotten that this acquisition puts a lot of top-tier cards in Xbox’s hand. The most obvious franchises that Xbox now owns include all the series mentioned up top, with Call of Duty and the Warcraft series being clear stand-outs in terms of potential financial revenue.
Similarly, Overwatch is still an incredibly popular game, and with the sequel well into development, the timing of the acquisition makes complete sense. Xbox can now also tap into the mobile market even more than they have before, with King titles like Candy Crush already showing an immediate and consistent return on investment.
As hinted at in their official statement, Xbox is likely going to use this monumental acquisition to really push its upcoming Cloud streaming service, as players will likely want to play a lot of these upcoming Activision Blizzard games on the go, or on different devices. Xbox is surely going to use mobile-friendly versions of titles like Overwatch 2 to try and sell the service to those who aren’t already on board.
On a similar note, this acquisition could potentially mean even more great things for Xbox Game Pass. A service that already gives players an unprecedented amount of bang for their buck, Game Pass could soon be getting a vast range of Activision Blizzard titles, ranging from their extensive back catalog, to upcoming titles. For Activision Blizzard’s more niche games, their presence on Game Pass may help to increase the game’s reach, and bring in new players that may have been skeptical on the series to this point.
This could also mean that some of Activision Blizzard’s upcoming games could release day-one on Game Pass, which has proven to be one of the service’s most praised features. Xbox’s current use of cross-platform and cross-saves bodes well for the new games joining the company, as many of Blizzard’s titles tend to be PC-focused.
This buyout is essentially just a much, much bigger version of Xbox’s ZeniMax acquisition, as following that deal, Xbox now owns all of Bethesda’s library, and is going to make great use of their upcoming games to sell their Game Pass service.
For a company that started the last generation with a whimper, and never really recovered, Xbox is making some serious strides now, and hopefully that turns out to be a wholly positive thing for players. Hopefully this means that more games come to Game Pass, that Xbox fans can finally start to get more first-class exclusives, and that Activision Blizzard will finally receive some management restructuring.
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