Microsoft is set to snap up Call of Duty company Activision Blizzard in what will be the largest deal struck in the video gaming industry.
The tech giant confirmed news of the deal with the gaming firm in a statement released on Tuesday.
Reports suggest that Microsoft’s acquisition of Activision Blizzard will be worth a huge $68.7bn (£50.6bn).
The historic deal means that Microsoft could have exclusive rights to some of the biggest video gaming franchises in the industry.
Activision Blizzard has published and produced titles such as World of Warcraft, Overwatch and the Call of Duty series of games.
Xbox and PC gamers could see these games feature on the popular Xbox Game Pass subscription service - which currently has around 25 million subscribes across the globe.
The deal is expected to be a blow to Microsoft rival Sony, amid rumours that the company is set to launch its own version of Xbox's Game Pass on PlayStation in the near future.
In a statement, Microsoft said that the two companies will continue to “operate independently” until the deal is complete.
The firm also said that the acquisition of Activision Blizzard will ‘accelerate’ their plans for Cloud Gaming.
Microsoft said it expects the deal to close in the 2023 fiscal year, which starts in July.
Phil Spencer, Microsoft Gaming CEO, said: “As a team, we are on a mission to extend the joy and community of gaming to everyone on the planet. We all know that gaming is the most vibrant and dynamic form of entertainment worldwide and we’ve experienced the power of social connection and friendship that gaming makes possible.
“As we pursue that mission, it is incredible exciting to announce that Microsoft has agreed to acquire Activision Blizzard.”
He added: “Until this transaction closes, Activision Blizzard and Microsoft Gaming will continue to operate independently. Once the deal in complete, the Activision Blizzard business will report to me as CEO, Microsoft Gaming.
“Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog.”
Activision has been buffeted for months by allegations of misconduct and unequal pay, and that was addressed on Tuesday by Microsoft chief executive Satya Nadella in a conference call with investors.
"The culture of our organisation is my number one priority," he said, adding that "it's critical for Activision Blizzard to drive forward" on commitments to improve its workplace culture.
Activision disclosed last year it was being investigated by the Securities and Exchange Commission over complaints of workplace discrimination.
Chief executive Bobby Kotick will retain his role, and he and his team will maintain their focus on driving efforts to strengthen the California company's culture and accelerate business growth.
Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, which is behind popular video games The Elder Scrolls, Doom and Fallout.
