Abstract

The case focuses on the slow and steady rise of Microsoft Corp. (Microsoft), a leader in computing software, in the gaming business. The case describes the early steps Microsoft took to enter the gaming business beginning with its built-in PC games and followed by gaming consoles. Microsoft also looked at inorganic growth through a series of acquisitions in the 2000-2010 periods and its development of Xbox and its upgrades. The case then focuses on some of the competitor products and how Microsoft was unable to garner significant market share that led to the decision to go for a major acquisition. Finally the case describes Microsoft’s $69 billion acquisition of video game behemoth Activision Blizzard after overcoming significant regulatory hurdles in the United Kingdom (UK) and the United States (US) that is expected to push Microsoft to the second place in the gaming business behind only Tencent, the Chinese multimedia giant. The acquisition was expected to help it compete more effectively with other tech behemoths such as Amazon and Google who had made significant investments in the gaming sector. Will Microsoft's acquisition of Activision Blizzard have a far-reaching impact on the gaming industry? Will it solidify Microsoft's position as a market leader and perhaps redefine the industry's competitive dynamics?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Examine the drivers of diversification of business
• Understand how to gain access to markets
• Identify the need for acquisition strategies and the benefits and challenges of M&A
• Compare the benefits of inorganic growth over organic growth

Keywords

Growth Strategy; M&A; Market share; Competition; Organic Growth; Inorganic Growth; Diversification