Kiss the video game industry’s $70+ billion in total 2021 deals goodbye
We’re less than three weeks into 2022 and we may have already set a new annual dollar-value record for video game industry mergers, acquisitions, and investment in the space.
Microsoft (MSFT) announced it will acquire video game giant, Activision Blizzard (ATVI) in a $68.7 billion all-cash deal.
This deal is, by far, the largest in video game industry history.
The previous largest deal ever occurred just eight days ago when Take-Two Interactive (TTWO) announced the acquisition of Zynga (ZNGA) for $12.7 billion.
These two deals combined, at $81.4 billion, have already surpassed all the deal value of the first three quarters of 2021. With a cadre of smaller deals included, the total deal-value of 2022, just 18 days in, may have surpassed the record-breaking year of 2021.
With this deal, Microsoft will acquire Activision at $95 per share, representing a 45% premium over Friday’s (Jan. 14) close. Take-Two paid a 64% premium for Zynga.
Over the past few years, Microsoft has been quite aggressive in acquiring companies in the gaming space. Two notable deals include its $2.5 billion acquisition of Minecraft developer, Mojang and its $7.5 billion acquisition of Bethesda.
But even with its latest mega-deal, Microsoft shows no signs of slowing down its growth-by-acquisition strategy. One it hopes will allow the company to dominate the space.
With the video game industry alone expected to be worth well over a half trillion dollars by 2028, it’s no wonder why Microsoft, and other large players like Take-Two have been on acquisition sprees.
But consolidation in the industry isn’t occurring solely at the top. Smaller companies, both public and private, with either patented game-tech or a strong userbase could be next on the acquisition block.
Investors in these smaller publishers, developers and game-tech companies could be huge winners if acquired, especially if acquired at large premiums, like the 64% over-market value paid to Zynga shareholders and the 45% over-market value paid to Activision shareholders.
Read more about the Microsoft acquisition of Activision, HERE
Or discover potential acquisition targets, HERE
Source: https://www.cnbc.com/2022/01/18/microsoft-to-buy-activision.html