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Facebook may be forced to respond to Microsoft's acquisition of Activision: analyst

·Anchor, Editor-at-Large
·2-min read
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In the new war for gaming assets that has descended on the tech industry in part due to splashy deals by Microsoft and Take-Two Interactive this year, the ball is now squarely in the court of Meta (aka Facebook) to make a move to support its metaverse ambitions.

"Facebook I think has a strong on-ramp with the Oculus with the metaverse. The challenge — and this is due diligence from my kids — they need for games and more content. I wouldn't be surprised if Facebook went on to do some small studio acquisitions," said Jefferies veteran tech analyst Brent Thill on Yahoo Finance Live.

In a surprising move Tuesday, Microsoft said it would acquire Activision Blizzard for $95 a share. The deal, valued at $68.7 billion, is Microsoft's largest takeover ever. The deal comes as Activision shares had dropped 27% in the past year before the deal amid multiple cultural controversies inside the company. Bloomberg reported Activision Blizzard CEO Bobby Kotick approached Meta to gauge their appetite on a deal, but was rebuffed.

Meta logo displayed on a phone screen and Meta page on Facebook displayed on a laptop screen are seen in this illustration photo taken in Krakow, Poland on October 29, 2021. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
Meta logo displayed on a phone screen and Meta page on Facebook displayed on a laptop screen are seen in this illustration photo taken in Krakow, Poland on October 29, 2021. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

Microsoft's deal arrives a week after Activision rival Take-Two Interactive said it would shell out $11 billion to buy veteran mobile gaming publisher Zynga.

When the Activision Blizzard transaction closes, Microsoft will become the world's third-largest gaming company by revenue, behind Tencent and Sony, according to the tech giant.

Microsoft will be acquiring iconic franchises like "Warcraft," "Diablo," "Overwatch," "Call of Duty" and "Candy Crush," all which have massive potential in the metaverse given Microsoft's Halo Lens hardware that competes with Facebook's Oculus.

It's strike now or lose out for Meta, warns Thill — who has long had a bullish stance on the company's stock.

"The chess pieces are moving quick. It's going to put pressure on everyone in the industry," said Thill. "There are only a few more assets to acquire."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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