EVEN FOR Microsoft, which boasts a market value of $2.3trn, $69bn is a lot of money. On January 18th the firm said it would pay that sum—in cash—for Activision Blizzard, a video-game developer. It is by far the biggest acquisition in the video-game industry’s history, and the largest ever by Microsoft, more than twice the size of its purchase in 2016 of LinkedIn, a social network (see chart). The move, which caught industry-watchers by surprise and propelled Activision Blizzard’s share price up by 25%, represents a huge bet on the future of fun. But not, perhaps, a crazy one.
Gaming was a big, fast-growing business even before the pandemic. Lockdowns bolstered its appeal—to hardened gamers with more time on their…