Back of the Envelope Math on Microsoft’s Activision Acquisition

Phil Spencer, announcing Microsoft’s intention to buy Activision for $68.7 billion:

Until this transaction closes, Activision Blizzard and Microsoft Gaming will continue to operate independently. Once the deal is complete, the Activision Blizzard business will report to me as CEO, Microsoft Gaming.

Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog. We also announced today that Game Pass now has more than 25 million subscribers. As always, we look forward to continuing to add more value and more great games to Game Pass.

Game Pass subscriptions cost between $10–15 per month. Let’s just call that about $150/year per subscriber. That’s just under $4 billion per year. Assume that the Game Pass subscriber base will keep growing, and $69 billion for Activision doesn’t seem absurd as a long-term investment. And that’s just counting Game Pass subscription revenue, not traditional game sales.

★ Tuesday, 18 January 2022