Microsoft on Tuesday announced it will acquire ‘Call of Duty‘ videogame maker Activision Blizzard in an all-cash deal worth $68.7 billion. 

Microsoft has offered to buy Activision shares at a 45% premium over their closing price on Friday. Microsoft will pay $95 per share, while Activision shares were trading at $89.55 before the bell on Friday. The deal, which includes Activision Blizzard’s net cash, will make Microsoft the third-largest gaming company in the world, behind Tencent and Sony. 

“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,” Microsoft chairman and CEO Satya Nadella said in a statement.

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“We’re 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.”

Microsoft has been making big moves in recent years to establish its dominance in the gaming industry. The tech giants have acquired ‘Minecraft’ makers Mojang Studios and Zenimax in multi-billion deals. 

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In 2020, Microsoft acquired Bethseda, developers of ‘The Elder Scrolls’ and ‘Fallout’ franchises, for $7.5 billion to boost Xbox’s exclusive title collection – something Sony’s Playstation has had the upper hand in for years. 

Now, with Activision’s library of games such as the hit FPS series ‘Call of Duty’, ‘Overwatch’ and ‘Candy Crush’ among others, will be a big boost for Microsoft in the console war. 

The acquisition will also bolster Microsoft’s Game Pass, as the company plans to launch Activision Blizzard games into the subscription service. Game Pass recently reached the milestone of 25 million subscribers, Microsoft confirmed. 

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Activision shares have slumped over 37% since hitting their record high last year, with sexual harassment and other misconduct affecting the company’s image. The company has promised to address the issue, saying on Monday that it has fired over three dozen employees and have disciplined another 40 since last July. 

Microsoft have confirmed that Bobby Kotick will continue to serve as CEO of Activision Blizzard.