Microsoft Corp said on Tuesday it would buy "Call of Duty" videogame maker Activision Blizzard for $68.7 billion in cash, the largest deal in the sector making the Xbox maker the third-largest gaming company by revenue.
Microsoft's offer of $95 per share is at a premium of 45 percent to Activision's Friday close.
Shares of Activision were up nearly 38 percent at $65.39 before being halted for news.
"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 Chief Executive Officer Satya Nadella said in a statement.
Demand for video games has surged during the pandemic, as stuck-at-home consumers play more games to keep themselves entertained.
Activision's library of games such as "Call of Duty" and "Overwatch" also gives Microsoft's Xbox gaming platform an edge over Sony's Playstation, which has for years enjoyed a more steady stream of exclusive games.
Bobby Kotick will continue to serve as CEO of Activision Blizzard.
Last week, rival videogame publisher Take-Two Interactive Software Inc said it would buy "FarmVille" creator Zynga in an $11 billion cash-and-stock deal, marking one of the biggest industry-wide acquisitions of all time
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