(Photo by Daniel Boczarski/WireImage)
Video-game stocks rallied Tuesday while the broader market sold off, after Microsoft reportedly agreed to acquire Activision Blizzard for $69 billion in an all-cash transaction.
Electronic Arts rose by about 7%, and Ubisoft surged by nearly 9%. Immersive gaming company Roblox rallied more than 2% before giving up gains. "Grand Theft Auto" maker Take-Two — which reached a deal last week to buy Zynga — added as much as 5%. Meanwhile, Activision stock soared 38%.
Microsoft and Activision's reported merger puts the former further into the video-game world and also acts as a lifeline for the latter. Earlier, Activision had seen its stock price down 40% amid workplace sexual harassment allegations.
The deal also gives the world's second most valuable company greater exposure to the emerging metaverse sector, Loup Ventures' Gene Munster told CNBC.
The video game sector has made splashes in recent months as companies race into the nascent metaverse sector. Take-Two has said it expects to leverage its takeover of Zynga for the metaverse.
And Roblox has emerged as one of the leading players in the metaverse. Michael Loukas, the CEO of exchange-traded-fund firm TrueMark Investments, called Roblox a "category killer," or a hypergrowth stock he sees becoming dominant.
It allows younger audiences of nearly 50 million users to build interactive worlds, which "coincides really well with what the metaverse is meant to do," said Loukas.
