Microsoft's (MSFT) $68.7 billion play for Activision Blizzard (ATVI) has video game stocks on the move Tuesday as the sector's biggest-ever deal sparks a wave of fresh takeover speculation.
Microsoft will pay $95 a share for the Call of Duty and World of Warcraft gamemaker, the companies said Tuesday, a level representing a 45% premium to Activision's Friday closing share price.
The deal, the video game sector's biggest, could see rivals scrambling to secure their place, as well as their scale, in the 3 billion player-strong market as companies to establish and monetize their subscriber bases ahead of their move into the so-called metaverse, a hyper-realized version of the internet pioneered by Facebook parent Meta Platforms (FB).
Video game companies generated around $180 billion in revenues last year, an industry report published in October noted, a modest increase from 2020 levels lead by around $90 billion in revenues from mobile gaming options.
"Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms," said Microsoft CEO Satya Nadella. "We're investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all."
Zynga (ZNGA) shares, for example, were marked 0.2% higher following news of the Microsoft-Activision deal as investors bet that new suitors may emerge for the Farmville maker following its agreed $12.7 billion takeover by Take-Two Interactive (TTWO) last week.
Electronic Arts (EA) could be a potential buyer, given its reliance on mobile and a desire to ensure Take-Two doesn't steal some of its market share, but it's also having to work through recent acquisitions of Glu and Playdemic, which cost a collective $3.5 billion.
Roblox Crop (RBLX) were also on the move, falling 2% to $77.51 each, while Electronic Arts was marked 4.7% higher at $136.53 each
Take-Two shares jumped 2.05% to $155.70 each while the U.S. listed shares of China-based Tencent Holdings (TCHEY) slumped 6% to $57.04 each.
