According to experts of Reuters Breakingviews Microsoft CEO Satya Nadella may initiate acquisition of Netflix in 2023.
From the very beginning, Microsoft actively expanded its own business by acquiring other companies. There are already 273 items in Microsoft’s list of acquisitions (https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Microsoft), but the company began to conclude particularly high-profile deals after Satya Nadella took the chair of the executive director in 2014.
Minecraft developers Mojang studio – $2.5 billion (2014); LinkedIn – $26 billion (2016); GitHub – $7.5 billion (2018); ZeniMax Media – $8.1 billion (2020); Nuance Communications – $19.7 billion (2021). And, finally, Activision Blizzard – $68.7 billion.
As you well know, there are some problems with the latest acquisition. Sony doesn’t like it, neither do US Federal Trade Commission and regulators of several other countries. But the acquisition of Netflix, if it does happen, will be much easier to promote to the American and European antimonopoly institutions, after all, such a streaming service is not a profile business for Microsoft. On the other hand, being able to add your own streaming to hundreds of millions of devices, Windows PCs, game consoles… that’s a pretty good competitive proposition.
Especially since the two companies already cooperate quite closely. It was Microsoft that became the advertising partner of Netflix for new ad-supported subscription service. Microsoft President Brad Smith is a member of Netflix’s board. Well, Netflix apps already work on Windows PC and Xbox.
On the other hand, Netflix, which is suffering its first-ever subscriber decline, has big plans of its own for games. In 2022, the company acquired the developer Spry Fox, its sixth own studio, and already actively offers its own games between films, which, by the way, are quite good. And this is where Netflix could borrow cool projects from Microsoft’s catalog and generally get quality expertise from one of the leaders of the gaming market.
The asking price is $190 billion, including a 30% premium to the value of Netflix shares. Microsoft has such money. Of course, such significant investments will not pay off quickly, but Satya Nadella is used to taking risks and knows how to look a little further. So… In 2023, Microsoft could indeed acquire Netflix, especially if the deal with Activision Blizzard is eventually blocked. Stock up on popcorn.