Microsoft announced plans on Tuesday morning to purchase gaming mega-publisher Activision Blizzard for a record-setting $68.7 billion. When finalized, the acquisition would bring franchises like Call of Duty, Overwatch, Diablo, World of Warcraft, Starcraft, and many more under the umbrella of the Xbox maker.
That’s a lot of money for a bunch of games and a ton of sexual harassment claims.
It *sounds* a lot of money, but it actually makes sense. They have too much cash.
Microsoft had $136bn cash at hand in 2020, this year probably more. It means they can no longer grow as fast as they used to before.
The growth cycle is almost universal for successful companies. Tesla is said to make about $10k per vehicle. But they use it all to build new factories and double production every year. Amazon became a trillion dollar enterprise by investing almost 100% of their income in new areas (who else remembers them being an online bookstore only)?
Microsoft needs to grow, or die. Like every other organism on Earth, natural or artificial.
side note: There are other things, like how they will clean up the culture at ActiVision / Blizzard, of course.