Microsoft’s first acquisition in 1987, Forethought, was the developer of a presentation program that would later become PowerPoint. Since that time, the company has made an average of six purchases every year, with fourteen of those exceeding the $1 billion mark.
Microsoft acquired Activision Blizzard in January 2022 in a mega-deal worth $68.7 billion.
The deal to acquire the videogame developer became the company’s largest, far eclipsing its purchase of LinkedIn (see below) in 2016.
LinkedIn was acquired in 2016 for $26.2 billion in cash. In a statement, CEO Satya Nadella noted that he expected LinkedIn to be a source of competitive advantage for Microsoft.
LinkedIn co-founder Reid Hoffman was more philosophical, expressing that the deal was “a re-founding moment” for the company and that the “relationship with Microsoft, and the combination of their cloud and LinkedIn’s network… gives us a chance to change the way the world works.”
Microsoft acquired ZeniMax Media – parent company of video game developer Bethesda Softworks – in 2021 for $7.5 billion. Responsible for titles such as Fallout and Doom, the Bethesda purchase bolstered Microsoft’s first-party Xbox line-up.
Bethesda’s creative team would also be incorporated into the company to make it an industry leader and enable it to honor a commitment to the wider Xbox community.
Affirmed Networks is a company with a core focus on virtualized, cloud-native networking products for telecommunications businesses. Particularly attractive to Microsoft was the company’s 5G and edge computing capabilities with customers such as Orange, Vodafone, Telus, AT&T, and STC. Previously, these customers were inaccessible since they tended to build their own data centers and manage them with proprietary hardware and software.
Mojang is a Swedish game developer best known for creating the popular game Minecraft. Mojang spokesperson Owen Hill said that the $2.5 billion Microsoft deal was approved because the co-founders found it increasingly difficult to manage the company on their own.
Moving forward, Microsoft intended to add new content and features to the game without sacrificing its appeal and alienating the game’s loyal core audience.
The OpenAI Deal
- Microsoft has made an average of six acquisitions per year since its first purchase in 1987. Fourteen of these were deals exceeding $1 billion.
- Activision Blizzard is the most significant purchase to date, with the resultant deal making Microsoft the third-largest video game developer in the world.
- Microsoft has also acquired Mojang and ZeniMax Media to further its video game aspirations, while Affirmed Networks and LinkedIn are more related to cloud and networking solutions for business.