Phase 1: Case Opening & Structuring

Client Context

Microsoft announced its intent to acquire Activision Blizzard for $68.7 billion in January 2022, representing the largest gaming acquisition in history. The deal faces regulatory scrutiny globally, with concerns about market concentration in gaming, cloud gaming services, and subscription models.

Key Metrics & Market Position

$68.7B

Deal Value

$95/share

Offer Price (45% premium)

9,500

Activision Employees

400M+

Monthly Active Users

Gaming Market Landscape

The Challenge

As Goldman Sachs' advisor to Microsoft, how would you evaluate the strategic rationale and potential synergies of this acquisition?

Select Your Framework

Synergies & Value Creation

Focus on revenue synergies, cost savings, and strategic value drivers in gaming ecosystem

Strategic Rationale

Analyze market positioning, competitive dynamics, and platform strategy

Financial Analysis

Deep dive into valuation, returns analysis, and deal economics

Phase 2: Information Gathering

Good framework choice. Before we dive into the analysis, what additional information would you need?

Select Your Questions (Choose up to 3)

What are Activision's key revenue streams and their growth rates? How does this acquisition fit with Microsoft's Game Pass strategy? What are the regulatory concerns and likelihood of approval? What are the expected cost synergies from the merger? How will this impact Microsoft's position in mobile gaming?

Phase 3: Quantitative Analysis

Activision Blizzard Financial Overview

Metric	2019	2020	2021	2022E	CAGR
Revenue ($B)	6.49	8.09	8.80	7.30	4.0%
Operating Income ($B)	1.95	2.70	3.26	2.45	7.9%
Operating Margin	30.0%	33.4%	37.0%	33.6%	-
Monthly Active Users (M)	316	397	371	361	4.5%

Revenue by Segment (2021)

Synergy Calculation

Calculate the expected annual synergies from this acquisition:

Revenue Synergies - Game Pass ($M)

Revenue Synergies - Mobile ($M)

Cost Synergies - Operations ($M)

Platform Integration Benefits ($M)

Valuation Analysis

What is the implied EV/EBITDA multiple for this transaction?

Enterprise Value ($B)

2021 EBITDA ($B)

Phase 4: Qualitative Insights

Based on your quantitative analysis, let's identify the key strategic insights and risks.

Strategic Considerations

Key Value Drivers

✓ Game Pass subscriber acceleration (25M → 50M+ potential)
✓ Mobile gaming entry via King (Candy Crush)
✓ IP portfolio (Call of Duty, Warcraft, Overwatch)
✓ Cloud gaming competitive advantage
✓ Metaverse and platform play

Key Risks

⚠️ Regulatory approval uncertainty (FTC, EU, UK)
⚠️ Integration complexity and culture clash
⚠️ Premium valuation (45% premium)
⚠️ Key talent retention
⚠️ Platform exclusivity backlash

Prioritize the Top 3 Strategic Initiatives

Priority 1:

Priority 2:

Priority 3:

Phase 5: Final Recommendation

You have 60 seconds to present your final recommendation. Be concise and data-driven.

Structure Your Recommendation

Present your recommendation following this structure:

Clear recommendation (proceed/modify/decline)
3 key supporting points with data
Major risks and mitigation strategies
Next steps and timeline

Your Recommendation

1:00

Case Complete - Performance Review

0/100

Final Score

Microsoft-Activision Gaming Consolidation