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Colosseum: Presentation Report

The document summarizes Alan Yeldo Gheevarghese's presentation report on Microsoft's acquisition of Activision Blizzard. The report includes details on the topic, reasons for choosing it, key contents discussed, and main learnings. It describes how Microsoft announced a $68.7 billion deal to buy Activision Blizzard in January 2022. The acquisition would make Microsoft one of the largest video game companies and allow it to own popular franchises like Call of Duty. The main reasons for the purchase included expanding into mobile gaming through King, bypassing app store fees, building the metaverse, and supporting cloud, content and creators.

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Alan Yeldo
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79 views7 pages

Colosseum: Presentation Report

The document summarizes Alan Yeldo Gheevarghese's presentation report on Microsoft's acquisition of Activision Blizzard. The report includes details on the topic, reasons for choosing it, key contents discussed, and main learnings. It describes how Microsoft announced a $68.7 billion deal to buy Activision Blizzard in January 2022. The acquisition would make Microsoft one of the largest video game companies and allow it to own popular franchises like Call of Duty. The main reasons for the purchase included expanding into mobile gaming through King, bypassing app store fees, building the metaverse, and supporting cloud, content and creators.

Uploaded by

Alan Yeldo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Colosseum Presentation Report

Name: Alan Yeldo Gheevarghese


Class: 2 BCom B
Registration Number: 21SJCCC105
Date of Presentation: 29th March 2023
Topic Chosen: Microsoft acquisition of Activision Blizzard

1
Contents
Particulars Pg.
No.
1. About the topic 3
2. Reason behind choosing the topic 4
3. Contents of the topic 5
4. Key learning from the topic researched 7
5. Bibliography 7

2
About the Topic

Microsoft declared its intention to buy Activision Blizzard for $68.7 billion in cash on
January 18, 2022. Activision, Blizzard Entertainment, and King would all be owned by
Microsoft as part of the Xbox Game Studios (Microsoft Gaming) division under the terms
of the deal, which is anticipated to close by the spring of 2023, subject to shareholder
and regulatory approval.
One of the biggest video game publishers in the world, Activision Blizzard will have $8.8
billion in annual revenue in 2021. Activision Publishing, Blizzard Entertainment, King,
Major League Gaming, and Activision Blizzard Studios are the company's five business
divisions. Its holdings include the rights to Candy Crush Saga from King, Call of Duty,
Crash Bandicoot, and Spyro from Activision Studios, as well as Warcraft, Diablo,
StarCraft, and Overwatch from Blizzard Entertainment.
Franchises like Call of Duty, Crash Bandicoot, Spyro, Warcraft, StarCraft, Diablo,
Overwatch, and Candy Crush would be under Microsoft's ownership after the
acquisition. It would be the largest acquisition of a video game in history if approved by
international regulators. The merger would hurt competition, so the U.S. Federal Trade
Commission (FTC) and the European Commission (EC) both formally filed complaints to
block the acquisition.
In addition to manufacturing the Xbox line of gaming consoles and running Xbox Game
Studios, a group of developers who produce first-party games, Microsoft is a major
player in the computing software industry. Microsoft completed the acquisition of
ZeniMax Media and Bethesda Softworks in March 2021 for an estimated $7.5 billion,
making it one of the biggest purchases of a video game company at the time.

3
Reason behind choosing
the topic
Mergers and Acquisitions can take place for a variety of reasons. The underlying reason
is obviously to increase the market capitalization of any organization. But there could be
other reasons behind this merger. It can either be to enhance the technological
capabilities of the organization or rather just to gain a greater number of profits from its
operations. Likewise, there can be several good or bad reasons behind these mergers.
The authorities and those in charge of sanctioning these mergers and acquisitions will
also investigate the various reasons behind these mergers. It is upto these authorities to
see whether the good outweighs the bad reasons and whether the merger benefits our
society or to check whether these mergers are only for the self-benefits of these
organisations.

4
Contents of the topic
5 Reasons behind Microsoft acquisition of Activision
Blizzard

1. Size of the organisation: 


 Prior to the acquisition, Microsoft had a market share of 18-20% and
activision had a market share of 9-10%. From this it is obvious that
Microsoft insisted on increasing their holdings in the market.
 The transaction, if it can get regulatory approval, will create the
world's No. 3 global gaming company, catapulting Microsoft to just
behind China's Tencent Holdings Ltd., the publisher of League of
Legends, and game console rival Sony Corp., maker of the PlayStation.
 Activision openly agreed that without the partnership with Microsoft,
they wouldn’t be able achieve their goals and aspiration against
the large gaming companies like Tencent games and Sony corp. So, the
first and the foremost reason behind the acquisition to be considered
can be to increase the size of both the organisation.
 
2. Entry into Mobile Gaming:
 Microsoft identified mobile gaming as the fastest-growing segment
of gaming.
 Microsoft has next-to-no presence in mobile gaming. Activision owns
mobile-gaming studio King, maker of Candy Crush, one of the most
popular mobile games of all time.
 So, this also became a reason for Microsoft to acquire Activision who
had already established a brand in mobile gaming segment.

3. Bypass App Store Fees: 


 Everyone that has an iPhone knows that in order to tap into the games
in apple arcade you have to pay a subscription fee
 Nadella wants his gaming empire to be big enough that gamers
would be able to bypass Apple Inc.'s App Store fees.
 Microsoft has been at war with Apple, over the fees the app stores
charge for games. Even Nadella openly expressed that Microsoft face
strong global competition from companies that generate more revenue
from game distribution than we do from our share of games sales and
subscriptions.
 So, Microsoft stated that they needed more innovation and investment
in content creation and fewer constraints on distribution and that this
was also a reason to acquire Activision.

5
4. Creation of Metaverse: 
 Gaming is one of Microsoft's two big metaverse plays (the other is
Office and conference software).
 The CEOs of both the companies already view the communities of
gamers that have grown up around titles like Minecraft and Halo as
similar to the metaverse concept.
 Microsoft claims that the acquisition will offer even more massive and
devoted game communities to create their own metaverses.
 At the time of acquisition also Microsoft claimed that their primary
motive has to support many metaverse platforms, as well as a robust
ecosystem of content, commerce and applications.

5. Creation of the Three C's:


 Nadella's corporate strategy has been revolving around three main
ideas cloud, content and creators.
 Cloud: Microsoft wants to get as much of Activision's past and future
content onto its cloud gaming service, Xbox Game Pass, which has
been helping the software maker's sales with a steady stream of
subscription revenue.
 Content: The deal also lets Microsoft tap into a pool of players
creating their own gaming content and worlds. For this Microsoft have
included Minecraft, LinkedIn and GitHub to the Microsoft platform
services.
 Creators: Nadella has been greater priority to content creators and
was shopping for a big asset that would give him another large
community of creators. He failed to land social video service TikTok,
and talks with Pinterest Inc. and Discord Inc. similarly went nowhere.
Activision is the latest try to get a platform with creators.

6
Key learning from the topic

1. Plausible Reasons Behind Microsoft acquisitions of Activision Blizzard


2. Gains that both the companies can get from this acquisition
3. Future competitions to be faced by both the organisation
4. Future plans of both the companies as a single organisation

Bibliography
https://www.ndtv.com/world-news/five-reasons-microsoft-is-making-activision-
blizzard-its-biggest-deal-ever-2716341

https://www.nytimes.com/2022/01/19/technology/microsoft-activision-games.html

https://twistedvoxel.com/microsoft-main-reason-acquiring-activision-mobile/

Presentation Link;
https://docs.google.com/presentation/d/1tWXO1vNGNX2-
WkuOAL0cj4QT2_11MVwS9izZ5SOdzgA/edit?usp=sharing

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