Why Microsoft is splashing $69bn on video games

EVEN FOR Microsoft, which boasts a market value of $2.3trn, $69bn is a lot of money. On January 18th the firm said it would pay that sum—in cash—for Activision Blizzard, a video-game developer. It is by far the biggest acquisition in the video-game industry’s history, and the , more than twice the size of its purchase in 2016 of LinkedIn, a social network (see chart). The move, which caught industry-watchers by surprise and propelled Activision Blizzard’s share price up by 25%, represents a huge bet on the future of fun. But not, perhaps, a crazy one.Gaming was a big, fast-growing business even before the pandemic. Lockdowns —to hardened gamers with more time on their hands and bored neophytes alike. Newzoo, an analysis firm, reckons revenues grew by 23% in 2020, to nearly $180bn. That growth has attracted the attention of other tech titans, including Apple, Netflix and Amazon, all of whom have dipped their toes into the market in recent years.