Microsoft is buying Activision in the video gaming industry's biggest deal yet. 

The $US68.7 billion ($95 billion) acquisition will give Microsoft rights to iconic franchises including World of Warcraft, Call of Duty, Overwatch, Candy Crush and Diablo - some of the world;s most popular games with millions of players each. 

Microsoft has attempted to frame the deal as a step into the “metaverse” - online virtual environments where people can work, play and socialise. 

Microsoft has reportedly agreed to pay a US$3 billion break-fee if the deal falls through, potentially by failing to gain antitrust approval.

It is good new for Activision shareholders, whose investments had been put at risk by allegations of sexual harassment of employees and misconduct by several top managers at the company.

Since mid-2021, Activision has faced a lawsuit from California regulators alleging the company “fostered a sexist culture”, and raising allegations of sexual harassment at the firm. Activision employees have staged walkouts to protest the company’s response to the issues, and the company has received requests from the U.S. Securities and Exchange Commission for information “regarding employment matters and related issues”.

Activision CEO Bobby Kotick is expected to leave the company after the transaction closes, reports say. 

The president of The World Bank, David Malpass, says Microsoft’s enormous all-cash purchase of Activision Blizzard could be better spent helping poor countries.

Speaking at the Peterson Institute for International Economics, Mr Malpass pointed out that Microsoft is spending more to buy Activision Blizzard than the entire net worth of some smaller countries.

The amount Microsoft is spending is significantly more than has been pledged by major nations to help poor nations. 

“You have to wonder; ‘Wait a minute, is this the best allocation of capital?’” Mr Malpass said of the Microsoft deal. 

“This goes to the bond market. You know, a huge amount of [capital] flows are going to the bond market.”