Valuation · Methodology II of III
Comparable Companies & Precedent Transactions
ATVI trades at a premium to interactive-entertainment peers on EV/EBITDA but is in-line on EV/Revenue. Precedent gaming M&A shows premiums ranging 20–65% — Microsoft's 45% premium is firmly within range.
Trading Comparables
| Company | EV ($B) | Revenue | EBITDA | EV/Rev | EV/EBITDA | P/E |
|---|---|---|---|---|---|---|
| Activision Blizzard (ATVI) | 60.5 | 7.5 | 2.7 | 8.1x | 22.4x | 22.5x |
| Electronic Arts (EA) | 36.2 | 7.4 | 2.1 | 4.9x | 17.2x | 19.8x |
| Take-Two Interactive (TTWO) | 25.6 | 5.4 | 0.7 | 4.7x | 36.6x | 28.4x |
| Ubisoft (UBI) | 6.4 | 2.3 | 0.5 | 2.8x | 12.8x | 16.4x |
| Nintendo (7974) | 41.0 | 12.6 | 4.6 | 3.3x | 8.9x | 14.2x |
| Roblox (RBLX) | 22.8 | 2.6 | 0.3 | 8.8x | 76.0x | n/m |
| Peer Median (excl. ATVI) | — | — | — | 4.9x | 17.2x | 19.8x |
Source: Capital IQ consensus, company 10-K filings (CY2022). Multiples are LTM as of deal announcement.
Precedent Transactions — Interactive Entertainment
| Date | Acquirer | Target | EV ($B) | EV/EBITDA | Premium |
|---|---|---|---|---|---|
| Oct '22 | Sony | Bungie | 3.6 | 14.5x | Private |
| Jan '22 | Take-Two | Zynga | 12.7 | 18.9x | 64% |
| Jan '22 | Microsoft | Activision Blizzard | 68.7 | 22.5x | 45% |
| Sep '20 | Microsoft | ZeniMax / Bethesda | 7.5 | 19.7x | Private |
| Apr '16 | Activision | King Digital | 5.9 | 8.6x | 20% |
| Aug '15 | Tencent | Supercell (84%) | 10.2 | 12.8x | Private |
Premium calculated vs unaffected share price 1 trading day prior to announcement. Source: SEC filings, company press releases.