I had to glance at the calendar while reading this. Is it April 1st yet? No. Microsoft (WKN: 870747) buys the gaming giant Activision Blizzard (WKN: A0Q4K4).
That’s a blast. Because Microsoft’s portfolio is growing with some exciting franchises such as Starcraft, Overwatch, World of Warcraft and Candy Crush.
The deal is said to be worth $68.7 billion – a new record. This puts Microsoft once again at the top of the most expensive takeovers in the gaming sector. The deal with Bethesda already set standards.
These are the 12 most expensive acquisitions in the gaming industry since 2014
- 68.7 billion US dollars: In January 2022, Microsoft announced the purchase of Activision Blizzard.
- 12,7 Mrd. US-Dollar: Take-Two will buy Studio Zynga in January 2022.
- 8.6 billion US dollars: In June 2016, Tencent buys the studio Supercell.
- $7.5 billion: Microsoft completes purchase of Bethesda in March 2021.
- 5.9 billion US dollars: Activision buys King Digital in November 2015.
- 2.5 billion US dollars: Microsoft buys Mojang in September 2014.
- $2.4 billion: In April 2021, Electronic Arts’ purchase of Glu Mobile is a done deal.
- $1.4 billion: In June 2021, Electronic Arts buys Playdemic.
- $1.3 billion: THQ Nordic buys Gearbox in February 2021.
- $1.2 billion: In December 2020, Electronic Arts confirmed the purchase of Codemasters.
- $315 million: In November 2017, Electronic Arts buys Respawn.
- 229 million US dollars: Sony buys Insomniac Games in February 2020.
For Microsoft, the Activision deal means peanuts
After all, the group earns around 67 billion US dollars a year. And not only that. Above all, Microsoft has about 130 billion US dollars in cash on the high edge. CEO Satya Nadella and his colleagues are paying for the deal almost out of petty cash.
I’m very excited to see what the quarterly figures look like next week. The numbers can’t be bad. Management knows that too. And the Activision deal may have been on the right track as early as fall 2021.
How do I get it? Important insiders diligently sold shares in November. Above all Nadella himself: He sold 838,584 shares on November 23 for a total of 285.3 million US dollars.
But don’t worry: Nadella’s strong ownership perspective remains intact. At around $221 million, his Microsoft stock position continues to outweigh his annual salary.
Microsoft strikes against Sony
Above all, the Activision deal is a smart move given Sony’s concrete subscription plans. Microsoft is snatching one of the most lucrative games catalogs from under its big competitor’s nose.
My thesis: Brands like Diablo and Call of Duty will not disappear from the Playstation. No, rather Sony will have to transfer a lot of money to Microsoft in the future in order to be able to offer the games.
And once again it is confirmed that in the future it will not be the better technology that will win, but the better platform. It’s about building and maintaining an ecosystem. The device on which the customers gamble plays a subordinate role. And this is where Microsoft clearly has the edge in gaming, I think.
Microsoft stock still has room for improvement
We can currently get the paper for $302.65 (as of January 19, 2022). The price-earnings ratio of 33.5 is still quite low compared to some of its competitors. I see the fair value of the stock at $350 given the growth opportunities. This results in upside potential of around 15%. But be careful: Take a look at the portfolios of your ETFs before you buy Microsoft shares. It is important to avoid cluster risks.
The item Microsoft stock: After the Activision deal, the platform king takes off! appeared first on The Motley Fool Deutschland.
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Henning Lindhoff does not own any of the shares mentioned. Teresa Kersten works for LinkedIn and serves on The Motley Fool’s board of directors. LinkedIn is owned by Microsoft. The Motley Fool owns shares of shares of and recommends Activision Blizzard and Microsoft.
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