Analysis of Microsoft’s Acquisition of Activision Blizzard Base on Precedent Transaction Analysiss

Abstract

The global video game industry, with its considerable market share attributed to console games, has long been dominated by three primary players: Microsoft's Xbox, Sony's PlayStation, and Nintendo's Switch.Three major companies have long controlled the worldwide video game business: Microsoft's Xbox, Sony's PlayStation, and Nintendo's Switch. Console games account for a large portion of this market. Activision Blizzard, a game publisher, significantly relies on these platforms inside this structure, earning significant income and profit from marquee brands like Call of Duty, Warcraft, and Diablo. In a game-changing move, Microsoft declared its intention to purchase Activision Blizzard in January 2022, a momentous development that may fundamentally alter the gaming industry. The $95 per share acquisition is presently the subject of intense antitrust investigation by international regulatory agencies, with UK's Competition and Markets Authority raising concerns about the merger's impact on both the console and cloud gaming industries. This article uses precedent case analyze method to estimate potential enterprise value post-acquisition. The case being studied is the acquisition of Zynga by Take-two Interactive in January 2022.