How the Microsoft and Sony partnership will shape the future of gaming.

The video game industry is witnessing significant developments, with Microsoft, the parent company of Xbox, revealing in early 2022 its plans to acquire Activision Blizzard, the creator of popular games such as "Call of Duty" and "World of Warcraft."

The $68.7 billion all-cash acquisition is predicted to close in 2023, making it the largest tech deal in history if approved by regulators and shareholders.

Eric Handler, managing director and senior research analyst at MKM Partners, stated that there has been a consolidation wave in the gaming industry for several years. Private equity money has flowed into the industry, making it highly fragmented. It is natural to see consolidation, especially with Microsoft being a trillion-dollar company. After the Microsoft-Activision purchase, Sony announced plans to buy Bungie in a deal valued at $3.6 billion. Bungie is the developer of the Destiny series, a multiplayer online game that combines first-person shooter and role-playing mechanics. Bungie is best known for creating the original Halo, a first-person shooter that launched with the first Xbox console in 2001. Representatives for both Sony and Microsoft declined to comment for this story. Watch the video to learn how these deals will shape the future of gaming.