Microsoft Corporation (NASDAQ:MSFT) announced Tuesday morning plans to buy Activision Blizzard, Inc (NASDAQ:ATVI) for nearly $70 billion in an all-cash deal. Following the announcement, shares of Activision skyrocketed more than 25%, while Microsoft shares traded down about 2%.
What To Know: Microsoft and Sony Group Corp (NYSE:SONY) have been in a nearly 20-year battle for market share in the video game industry; Microsoft has the Xbox consoles, while Sony runs PlayStation.
Years ago, Microsoft and Xbox Game Studios made moves to purchase the Halo franchise and make the game series an Xbox exclusive. This means that gamers who want to play Halo, can only do so on Xbox and not PlayStation.
Related: Microsoft To Acquire Activision In $68.7B Deal: What Investors Need To Know
Why It's Important: Halo itself helped Microsoft and Xbox snag market share away from Sony and PlayStation. Microsoft has also been working on the “Xbox Game Pass” a subscription-based model for gamers to pay one price each month and play different games. Think of a Netflix subscription but for video games.
Call of Duty games will likely be included on the Game Pass, but details have not yet been announced. Throughout the last couple of years, "Call of Duty: Warzone," a free-to-play battle royale game, has been one of the most popular online games in the world.
Plenty of Possibilities: There are plenty of different possibilities for how Microsoft decides to handle the Call of Duty franchise and its future.
- Microsoft Makes Call of Duty (including Warzone) Xbox Exclusive: If Microsoft does decide to make Call of Duty an Xbox exclusive, look for a lot of Warzone players to switch from PlayStation to Xbox.
- Microsoft Allows COD To Stay on PlayStation, But Takes Revenue: Microsoft will also have the option to allow COD to stay on PlayStation, but work out a revenue share deal with PlayStation that allows Microsoft to profit everytime someone purchases a copy of Call of Duty for PlayStation.
- Microsoft Makes Call of Duty Games Xbox Exclusive, but Keeps Warzone on Both Consoles: Another option would be to make the actual Call of Duty games Xbox exclusives, while allowing "Warzone" to stay on PlayStation servers. The benefit here for Microsoft, is that "Warzone" is a free online game. By allowing Warzone to stay on the PlayStation, Microsoft would ensure "Warzone" stays a huge hit while also profiting from in-game purchases.
'Call of Duty: Warzone' / Photo courtesy of Activision Blizzard
