Microsoft Corp has said it would acquire videogames maker Activision Blizzard for $68.7 billion in an all-cash deal. With this acquisition, Microsoft aims to accelerate its growth in the gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse.

In a statement on its website, Microsoft said that post-transaction, it would become the world’s third-largest gaming company by revenue, behind Tencent and Sony. The planned acquisition includes iconic franchises from the Activision, Blizzard and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” said Satya Nadella, chairman and CEO, Microsoft. 

Microsoft is investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all, Nadella added.

The acquisition also bolsters Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million subscribers. With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.

Bobby Kotick, the incumbent CEO, will continue in his role post the acquisition of Activision Blizzard. He and his team will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth.

Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.

“The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry,” Kotick said.

With studios around the globe, Activision Blizzard has nearly 10,000 employees. Most recently, it made headlines with allegations of sexual harassment and misconduct among company executives.

The deal is subject to customary closing conditions, regulatory as well as shareholder approval. The deal is expected to close in fiscal year 2023.