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Microsoft buys Activision in a $ 68.7 billion deal

Microsoft announced on Tuesday that it will buy video game giant Activision Blizzard in a $ 68.7 billion cash deal.

Shares of Activision rose about 37% in pre-market trading before stopping after the Wall Street Journal first reported the trade.

Microsoft stock fell more than 2% after the announcement

Activision, known for popular games like Call of Duty and Tony Hawks Pro Skater, has been embroiled in controversy for the past many months following reports of sexual misconduct and harassment among company executives. On Monday, Activision said it fired dozens of executives after an investigation.

Under the agreement, Activision CEO Bobby Kotick, who has faced calls to resign due to the cultural problems of his company, will remain CEO and report to Microsoft's Xbox CEO Phil Spencer.

Microsoft has become more aggressive with games over the last many years. It bought "Minecraft" maker Mojang for $ 2.5 billion in 2014. And last year, Microsoft completed a $ 7.5 billion acquisition of game maker Bethesda.

The deal also plays into a long-term vision for Microsoft as it competes with Meta (formerly Facebook) to build technologies to create a virtual world called metaverse. In fact, Microsoft CEO Satya Nadella was the first Big Tech CEO to publicly recognize the value of the meta-verse, months before Meta CEO Mark Zuckerberg. Today, virtual worlds are dominated by gaming, but the hope is that they will expand to accommodate other demographic groups and replace a lot of traditional social networking activity online.

This story is evolving. Come back for updates.

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