There's A Rumor That Microsoft Could Attempt To Buy Valve, But What Would That Even Look Like?

If you've been on the internet this morning browsing the gaming news, you've likely already come across a rumor that Microsoft could be prepping an offer of about $16 billion for Valve. The rumor stems from a tweet from Dior, a content creator mainly focused on Counter-Strike. For comparison, the Activision Blizzard purchase price was $68.7 billion.

How valid the claim is and who/what Dior's source(s) is isn't known at the moment, but let's set that aside for a moment and just walk through a quick thought exercise on the possibilities.

With approx. $80b CCE, Microsoft is preparing an offer of $16b for Valve

No stock, all cash pic.twitter.com/VCZq6HkFmO

— Dior (@xDiorCS) May 22, 2024

Valve has been the subject of MANY rumors throughout the years. Hell, being a private company, it's hard to even get an exact picture of just how profitable the company is at any given point. Sure, they make software, but Steam literally just prints money as the premier PC gaming distribution platform.

Figures over the last 2 years or so put Valve at between a $6-$8 billion valuation according to Bloomberg, Forbes, or AI valuation calculators. On the surface, that makes a $16 billion offer seem great! However, taking into account the fact that Valve generates billions each year in revenue, maybe the offer would be a bit shortsighted by the sellers.

Speaking of the sellers, we actually don't even have a clear picture of the entirety of Valve's ownership. While Gabe Newell owns quite a bit of the company, estimates on his exact ownership percentage range from 20-50%...so take that for what it's worth.

Many companies have tried to actually pull off this deal before and yet, we're still sitting at Valve being its private, secretive self. Hell, even Phil Spencer has said he'd love to buy Valve if the opportunity ever presented itself, something we learned from emails revealed during the FTC suit over Microsoft buying Activision Blizzard.

But would this be good for Microsoft or Valve?

Maybe.

Microsoft has been shifting this year to a more "global" market with its titles. Multiple titles that may have been Xbox exclusive have now been revealed to likely be available on multiple platforms. Game Pass may not be doing exactly as well as Microsoft needs it to be doing, and Microsoft really wants to get into the portable/handheld market and hey, looks like Steam already has a thing that does that!

On the surface, seems like a match for Microsoft. For Valve though? Meh, it really depends on how much Valve's ownership wants to just get out of the company with a fat paycheck. Newell himself already has more money than he could ever spend, so there's going to have to be some other motivation on that front. Other ownership, while obviously also rich, may really like a big fat check right now to walk away. Short-sighted, maybe, but still a great way to get a sweet paycheck. Newell and others could just like the idea of retirement or going off and starting something new, too. You never know.

By the way, the regulators would have a field day with this one. The Activision Blizzard purchase faced a ton of scrutiny and uphill fights in some countries, including the US. While this type of purchase may not draw the cries of "monopoly" that the Activision Blizzard deal did (yes, Valve is a software company, but that isn't the reason you buy Valve...at least not reason number 1), buying the largest PC digital distribution platform, one most of your key competitors would have to continue to pay to use under stipulations set by Microsoft would likely draw more than a few per se arguments under the Sherman Act and a few other acts on the books.

Finally, would it be good for gamers, the ones using and paying to use these platforms? I'll circle back on this one later in another piece as I'd like to get your initial thoughts first.

Would you be ok with this rumor if it happened? Would it be good for gamers? Chime in and let's talk about it a bit.

Anyway, these are just a few of my initial "gut" thoughts. I'm sure I'll have more as I stew on the rumor a bit more and I'll be sure to share them.

In the meantime, I've reached out to Valve and Microsoft to see what they have to say, if anything, about the rumor and I'll update this piece if I hear back.