Microsoft's Secret Attempt to Acquire a Leading Mobile Developer Surfaces Amidst ABK Deal
Microsoft's pursuit of gaming dominance included an attempt to acquire a leading mobile game developer before the monumental deal with Activision Blizzard King, the tech giant confirms
Microsoft initially tried to acquire Zynga, a major player in the mobile game development industry, before turning its attention to Activision Blizzard. This information came to light during the preliminary injunction hearing on the Federal Trade Commission's attempt to block Microsoft's acquisition of Activision Blizzard. Zynga, established in 2007, was already one of the top ten mobile game developers in the world by 2021, generating $2.8 billion in revenue. However, shortly after that, Take-Two Interactive, the publisher of Grand Theft Auto, acquired Zynga for a staggering $12.7 billion in a cash-and-stock deal that was finalized in May 2022. This acquisition remains the largest in the history of the gaming industry, although Microsoft's proposed buyout of Activision Blizzard would surpass it by 5.5 times if it receives approval.
Spencer revealed during a court hearing that Microsoft had attempted to purchase Zynga before the company was acquired by Take-Two. The talks with Zynga took a significant amount of time, as indicated by an email from Xbox CFO Tim Stuart to Senior Finance Director Jamie Lawver. Although Take-Two ultimately acquired Zynga, Spencer stated that Microsoft dropped the idea because it wanted to pursue an even larger opportunity in the mobile gaming industry. Microsoft then turned its attention to Activision Blizzard, the owner of Candy Crush maker King. This aligns with Microsoft's previous claims that the Activision Blizzard deal is primarily focused on mobile gaming.
Microsoft's ongoing struggle with the UK's Competition and Markets Authority has resulted in repeated expressions of frustration. The authority rejected Microsoft's $69 billion purchase of Activision Blizzard in April, following the FTC's lawsuit to block the deal four months earlier. Despite the ongoing legal argument about the company's mobile ambitions driving the acquisition, Microsoft's Activision Blizzard deal is now potentially facing its third hurdle in just a few months.
