Yesterday (January 18th, 2022) it was announced that Microsoft is planning to buy popular video game publisher Activision Blizzard for a very nice $69 billion. That’s billion with a ‘B’. While giant tech companies buying other giant tech companies is nothing new, as an avid gamer, I have taken particular interest in this deal. The most shocking part to me is just how much money $69 billion really is.

Video games have traditionally taken a backseat in mainstream media to film and television, rarely receiving as much attention as big movies or TV series. But many would be surprised to find out that the video game industry in 2020 made more money than the film and music industries combined (source). While this might be obvious as many were stuck in lockdown a majority of 2020, it does show gaming is a thriving industry.

So just how big of a deal is this? Well, big enough to inspire me to write this post to try to put some of the scale into perspective. So let’s talk numbers.

Last year Microsoft made headlines when it announced it had purchased ZeniMax Media, parent company of game developer Bethesda and seven other studios. This was an enormous deal at the time which has major impacts on the gaming industry. Microsoft shelled out $7.5 billion for ZeniMax Media, the Activision Blizzard deal will cost nearly 10x that amount.

Next, let’s take a look at Microsoft’s equivalent in the film industry, the mouse house itself, Disney. It’s no secret Disney has purchased its fair share of media companies over the years, but how big were those compared to the Activision Blizzard deal? Since its purchase of ABC back in 1995 for $19 billion, Disney has gone on to purchase Pixar Animation, Marvel Entertainment, and Lucasfilm Ltd., with each deal making major headlines when they were announced. If you were to add up how much Disney paid for all of these companies, it would equal roughly half (~$35.4 billion) of what Microsoft is paying for Activision Blizzard (source). It should be noted that these are not the only companies Disney has purchased, notably they scooped up 21st Century Fox in 2018 for $71.3 billion.

If we compare this to some other recent acquisitions, this deal will be the 3rd largest acquisition in any sector this decade, behind Unilever purchasing itself for $81 billion in 2020, and BHP’s proposed delisting on the London Stock Exchange in 2021, which the company would pay $86.2 billion. Looking at the tech sector, this will be the largest acquisition by far this decade, with Nvidia’s proposed purchase of Arm Holdings from SoftBank in 2020 for $40 billion in a not so close second (although that’s not looking too promising). In fact, if we don’t adjust for inflation, this will be the largest acquisition in the tech sector by transaction value in history, dethroning Dell’s purchase of EMC Corporation in 2016 for $67 billion.

So what does all of this mean? Well not much at this point considering we are still a year from the deal actually closing. This is definitely the biggest example of consolidation in the video game industry we have seen so far, and I’m sure it’s not the last. It feels like it’s only a matter of time until Microsoft, Sony, Nintendo and Tencent gobble up the entire industry. I do know one thing for sure, once the check clears the gaming industry is going to start looking a lot different.