Microsoft announced a historic US$69 billion deal to acquire US gaming giant Activision Blizzard on Tuesday, betting big on the video game market's prospects by acquiring the scandal-plagued "Call of Duty" developer.

Microsoft stated that by acquiring the struggling but highly successful Activision, it would become the third-largest gaming company by sales, behind Tencent and Sony — a significant shift in the burgeoning gaming industry.

If the deal is completed, it will be the industry's greatest acquisition, well surpassing Take-US$12.7 Two's billion acquisition of Zynga announced last week.

"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 CEO Satya Nadella stated, referring to the Internet's future virtual reality vision.

Activision, the California-based developer of "Candy Crush," has been hammered by employee protests, departures, and a state lawsuit alleging that it permitted toxic work environments and sexual harassment against women.

According to The Wall Street Journal, the firm has received over 700 reports of employee concerns about sexual assault, harassment, or other wrongdoing in the last seven months. Separate complaints concerning the same incident have been received in certain instances.

Nearly 20% of Activision Blizzard's 9,500 workers have signed a petition demanding the resignation of CEO Bobby Kotick.

The Journal reported that Kotick will remain CEO of Activision Blizzard but is anticipated to step down following the transaction's closure.

The transaction is projected to close in June 2023 – is subject to usual closing conditions, regulatory approval, and shareholder approval.

"Acquiring Activision will help jump-start Microsoft's broader gaming endeavors and ultimately its move into the metaverse, with gaming the first monetization piece of the metaverse in our opinion," Wedbush analysts said after the news broke.

This would be the largest acquisition in the company's history, surpassing LinkedIn's 2016 acquisition for US$26.2 billion.

"This is the industry's largest acquisition to date," said Daniel Ahmad, an analyst at Niko Partners. "An acquisition of this nature is a clear endorsement of the importance of the games industry globally."

Microsoft recently celebrated the 20th anniversary of the "Halo" video game franchise, which helped launch the Xbox system.

Xbox continues to be a significant player in a video gaming industry that is now estimated to be larger than the film industry, with market research firm Mordor Intelligence putting the industry's value at US$173.7 billion in 2020.

The sector is booming, with publisher Take-Two announcing a deal last week to acquire "Farmville" creator Zynga for US$12.7 billion as part of the publisher's substantial mobile gaming push.