Why Microsoft’s $2 trillion market value makes its $68 billion Activision acquisition a bargain

Even though consumer gaming accounts for only a minor portion of Microsoft’s overall revenue, the company’s announcement of a $69 billion all-cash bid to buy Activision Blizzard shows that the company is serious about the industry.

It’s easy to believe Microsoft should have put the money toward other, perhaps more profitable firms in its portfolio. On the other hand, Microsoft has tremendous resources to invest in the most rational elements of its business, with a market cap of just over $2 trillion (a figure that’s difficult to comprehend).

Even if this $70 billion wager fails to pay off, Microsoft will emerge relatively undamaged. With that amount of cash on hand, a corporation has a lot of alternatives, even if it means completing one of the most significant tech purchases in history.

Let’s not forget that this agreement follows Microsoft’s purchase of Nuance, a speech-to-text company, for $20 billion last spring. That acquisition is currently in regulatory limbo in the United Kingdom, which raises the question of whether regulators will take a careful look at the Activision Blizzard deal, which might be seen as a gaming market land grab, given its size and scope.

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