Microsoft, gaming powerhouse

Hello, it’s Dina in Seattle. Microsoft’s mega-acquisition of Activision is the culmination of a long journey by Satya Nadella. But first…Tod [View in browser]( [Bloomberg]( Hello, it’s Dina in Seattle. Microsoft’s mega-acquisition of Activision is the culmination of a long journey by Satya Nadella. But first… Today’s top tech news: - Activision Blizzard’s controversial boss is leaving—with a [lot of cash]( - SoFi got a [banking charter]( - Coinbase is [planning an NFT marketplace]( that doesn’t require crypto A big deal If you had told investors back when Satya Nadella took over as Microsoft Corp. chief executive officer in 2014 that his biggest acquisition would be a video game company, they would have been horrified. And yet on Tuesday Microsoft said it planned to [pay nearly $70 billion]( for Activision Blizzard Inc. in an acquisition that will make the combined company the No. 3 global gaming power. The deal is the largest in any industry since the start [of the pandemic](, and the biggest in Microsoft’s history. It’s also a testament to the speedy evolution of Microsoft’s business, and the rising economic might of video games. Eight years ago, some investors wanted Microsoft to get out of the games business altogether—discouraged by the Xbox’s tendency to lose money and its lack of connection to the lucrative business of selling software to companies. In 2013, the pricey Xbox One had a lackluster release. And the following year, in Nadella’s first companywide strategy memo after taking the job, he defined gaming as outside Microsoft’s core business, lumping it in with “other businesses in which we can have fundamental impact.” But video games remained on the company’s radar. Nadella opted to make his first acquisition as CEO a $2.5 billion purchase of the maker of the virtual world game Minecraft. The move gave Microsoft a boost on mobile and on platforms besides Windows, and it fit with Microsoft’s need to win over younger audiences. Nadella also handed the reins of Xbox to Phil Spencer, who cut prices at the unit and introduced new models. By 2017 the gaming console had stabilized its sales. That earned Spencer a promotion to executive vice president, and a spot on Nadella’s [senior leadership team](. Increasingly, Nadella came around to the idea that gaming was core to Microsoft’s cloud-computing mission. He could sell video-game makers [cloud tools]( to host their online games, and sell Xbox and PC gamers on the idea that they can pay Microsoft a monthly fee for gaming subscriptions and online titles. He grew enamored of the idea that Microsoft could acquire different communities of users, like Minecraft gamers, LinkedIn job hunters and GitHub’s software developers. In 2020, the company made another big bet on the top tier of gaming content. Microsoft agreed to pay $7.5 billion for Elder Scrolls and Doom publisher ZeniMax Media Inc., owner of the storied video-game publisher Bethesda Softworks. As creator-driven platforms like YouTube, TikTok and Twitch took off, Nadella wanted Microsoft to own [more of the creator ecosystem](. He tried and failed to buy TikTok, Pinterest and Discord before succeeding with Activision Blizzard. The added bonus, of course, is the entry into the metaverse afforded by the gaming company, with its massive open worlds. If it goes through, the Activision deal will be Microsoft’s biggest gaming purchase ever by a factor of nine. Meanwhile, Nadella has named Spencer CEO of gaming. As for investors, they don’t seem to mind too much. The company’s shares fell 2.4% Tuesday after the news, but they’re up more than 700% under Nadella. —[Dina Bass](mailto:dbass2@bloomberg.net) If you read one thing Airbnb CEO Brian Chesky said he’s going to start living in and working from different [Airbnbs](. Here’s what you need to know Five reasons Activision Blizzard was such an appealing [takeover target](. Crypto wallet provider Crypto.com [suspended withdrawals]( after “unauthorized activity.” Digital real estate company Redfin faces [accusations of discrimination](. Follow Us More from Bloomberg Dig gadgets or video games? [Sign up for Power On]( to get Apple scoops, consumer tech news and more in your inbox on Sundays. [Sign up for Game On]( to go deep inside the video game business, delivered on Fridays. Why not try both? Like Fully Charged? | [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Fully Charged newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](