Activision Blizzard (ATVI) shares closed 25% higher on Tuesday after Microsoft (MSFT) announced it will acquire the video game publisher for $95 per share. The deal, valued at $68.7 billion is Microsoft's largest takeover ever.
When the transaction closes, Microsoft will become the world's third-largest gaming company by revenue, behind Tencent (TCEHY) and Sony (SONY), according to the tech giant. The deal illustrates another consolidation move within the gaming industry — and massive bet on the future of the metaverse.
The software tech giant will be acquiring iconic franchises like "Warcraft," "Diablo," "Overwatch," "Call of Duty" and "Candy Crush."
"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," Microsoft chairman and CEO Satya Nadella said in a company statement.
"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," he added.
The acquisition comes amid recent sexual harassment allegations within Activision Blizzard. Last year, longtime CEO Bobby Kotick reportedly was considering stepping down if the harassment and abuse allegations within the culture of the company were not quickly fixed, according to the Wall Street Journal.
Kotick will continue to serve as CEO of Activision Blizzard, according to details regarding the acquisition provided by Microsoft on Tuesday.
Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO of Microsoft Gaming.
Microsoft shares slid more than 1% following the announcement.
Ines is a markets reporter covering stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre