Microsoft has swooped to buy scandal plagued Activision with a massive A$95.64-billion-dollar offer, it’s the largest ever made by the big global software Company who is paying US$95 a share.

This is Microsoft’s second big acquisition after the company bought Bethesda in 2021. It also makes Microsoft the world’s third-largest gaming company by revenue, behind Tencent and Sony.

The bid is a 45% premium on Activision’s closing price on Friday. Just before the announcement Activision shares surged nearly 38% in premarket trading overnight after The Wall Street Journal reported it was close to a deal with Microsoft, whose shares fell on the announcement.

Bloomberg claims it’s a bargain compared with the stock’s performance in the first half of last year, before a sexual bias lawsuit filed by a California state agency in July plunged the company into crisis.

The shares hit a high of more than $100 apiece in February and then lost nearly half their value by the end of the year.

Analysts claim that by adding Activision’s stable of popular titles it helps Microsoft expand its own offerings for the Xbox console and better compete with rival Sony who is reengineering their business around content, spanning movies and gaming.

Activision has a long history with Microsoft have delivered several hit games for the Companies Xbox.

The publisher’s largest franchise, Call of Duty, became successful largely due to Microsoft’s online platform Xbox Live which allows players to connect for multiplayer matches.

Currently Activision is grappling with a cultural upheaval over its treatment of women but despite this issue impacting the Company Activision Chief Executive Officer Bobby Kotick will stay on after the deal is finalised Microsoft said.

Once the deal closes, the Activision Blizzard business will report to Phil Spencer, who heads Microsoft Gaming. The deal value includes Activision’s net cash.

Kotick, who has led the company for three decades, has come under pressure from employees to resign in the wake of the ongoing lawsuits and allegations reported in the Wall Street Journal that tie him to reports of mistreatment of women and suggest that he was aware for years of sexual misconduct, including rape, at the company but didn’t report it to the board. Kotick has apologized and pledged to make changes.

Spencer said back in November 2021 that Microsoft was revaluating its relationship with Activision and making “proactive adjustments” in the wake of the Wall Street Journal report.

“Acquiring Activision will help jump start Microsoft’s broader gaming endeavour’s and ultimately its move into the metaverse with gaming the first monetization piece of the metaverse,” Dan Ives, an analyst at Wedbush Securities, wrote in a note to investors according to Bloomberg.

“With Activision’s stock under heavy pressure (CEO related issues/overhang) over the last few months, Microsoft viewed this as the window of opportunity to acquire a unique asset that can propel its consumer strategy forward.” he said.

Microsoft’s shares slid close to 2% when the news broke in the USA.

During the past 18 months COVID has impacted the business with Activision delaying two of its most anticipated games and gave a sales forecast for the fourth quarter that fell short of Wall Street’s expectations.

“We also recognize that after the close, we will have significant work to do in order to continue to build a culture where everyone can do their best work,” Microsoft CEO Satya Nadella on a call with investors.

Founded in 1979, Activision is home to some of the most popular game franchises in the world, including Candy Crush, Guitar Hero, Skylanders, Destiny, Crash Bandicoot and the Tony Hawk skateboarding titles. Its Call of Duty franchise is particularly notable for its lasting appeal, opening week sales and, increasingly, its reach in Asia.

The mobile edition of the game launched in China in December 2020, quickly hitting the top of the download charts. It brought in tens of millions of new fans, “with player investment in the first quarter on par with the rest of the world combined,” the company said in May.