Adding Activision 'rounds out' Microsoft's gaming strategy: Evercore
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With Microsoft (NASDAQ:MSFT) likely to close on its $69B acquisition of Activision Blizzard (NASDAQ:ATVI), investment firm Evercore ISI said the deal "rounds out" the tech giant's gaming strategy.
"We remain upbeat about the ATVI acquisition as it brings scale to MSFTâs gaming efforts (expands revenue by ~50%), especially in mobile, and improves MSFTâs [first-party] content catalog which should accelerate the flywheel for Game Pass, cloud gaming, and a gaming marketplace," analyst Kirk Materne wrote in an investor note.
Materne, who has an outperform rating and per-share price target of $400 on Microsoft (MSFT), also noted that gaming is an "underappreciated opportunity" for Microsoft (MSFT), said Activision (ATVI) could add between one and two percent to Microsoft's 2024 earnings per share. 
By 2025, Materne believes that gaming could be a $20B business for Microsoft (MSFT), but with Activision (ATVI) in the fold, it could be worth as much as $30B or more. 
Microsoft's (MSFT) acquisition of Activision (ATVI) looks like it may close this year as the FTC has lost twice in court and withdrawn its challenge. Additionally, the U.K.'s Competition and Markets Authority has expressed openness to a new investigation.
Earlier this month, the two companies pushed back the closing date of the deal to October.
Microsoft (MSFT) is slated to report fiscal fourth-quarter results after the close of trading on Tuesday.
More on Microsoft's acquisition of Activision

Microsoft gets 'trophy moment' with Activision court win: Wedbush
Why I Believe Microsoft Might Close Activision Deal Despite U.K. Objections
Microsoft, Activision extend deal deadline until Oct. 18 (update)