Fast Money Blog- 1/21/22

On Tuesday, January 18th, Microsoft Corporation (MSFT) said it would acquire Activision Blizzard, Inc. (ATVI). The deal, valued at $68.7 billion, is Microsoft's largest takeover ever. If the move closes as planned in 2023, it will make Microsoft the world’s third largest gaming company by revenue, behind Tencent and Sony.

What would the purchase of Activision Blizzard mean for Microsoft?

Here are four important things to keep in mind:

1) It immediately would give Microsoft a presence in the fast-growing mobile gaming category, creating a new division in the company called Microsoft Gaming.

2) It would put some of the most popular game franchises like “Call of Duty” and “Candy Crush” under Microsoft’s holdings.

3) Microsoft could choose to make some of these newly acquired games exclusive to their xBox Series Consoles, forcing gamers to have to purchase Microsoft Consoles in order to play them. This in essence could mean that Nintendo or Sony players would be deprived of their favorite games.

4) It would make Microsoft’s Game Pass service even more appealing, helping Microsoft’s mission to see it become the “Netflix” of gaming. At $14.99 per month, a Game Pass subscription gives gamers the ability to access over 100 games on smartphones, tablets, laptops, and smart TVs via the cloud. This “Cloud Gaming”, allows more people in more places around the world to participate in the Xbox community.

In this market you want to make sure you own stocks like MSFT, Apple, Inc. (AAPL), and The Home Depot, Inc. (HD). These Dow Jones giants have the buying power and cash flow to support non-organic growth through acquisitions.

Tyrone Jackson, The Wealthy Investor