The takeover follows a concerted effort by Activision to clean up its image. The company has reportedly ousted more than 30 staff and disciplined 40 others since the summer in an effort to clean up its image amid allegations over sexual harrassement and other forms of misconduct.

It followed sustained pressure from staff, clients and investors, after as many as 700 reports were made over misconduct problems within the business, including an allegation that one female employee was raped by her male supervisor in 2016 and 2017 that Activision settled out of court.

Activision was served with a harassment lawsuit from a California state agency in July. 

Meanwhile, Mr Kotick, who has spent more than 30 years with the business, has been accused of failing to tell the board about sexual misconduct allegations he knew about, while facing his own allegations of impropriety. Mr Kotick’s assistant complained in 2006 that he left a voicemail threatening to have her killed. 

Activision said the Wall Street Journal, which first reported the claims, gave a misleading view of Mr Kotick and the business. Mr Kotick has previously said that he regretted the alleged incident with the assistant, but had always been transparent with the board.

Microsoft said when the deal was announced that Mr Kotick would remain with the business as chief executive, but the Journal subsequently reported that he had agreed to leave when the deal completes.

The takeover follows a surge in demand for subscription streaming services, gaming and home entertainment in the wake of lockdown.

Satya Nadella, chief executive of Microsoft, said: “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

Microsoft is seeking to step up its battle with Sony and diversify revenues beyond its colossal cloud computing business by becoming a significant developer and publisher of games across console, PC and mobile. It has previously struggled to match Sony’s track record of creating critically-acclaimed exclusive titles that have driven PS4 and the PS5 console sales.

The swoop will bring popular Activision series such as Call of Duty, World of Warcraft, Crash Bandicoot, Overwatch and Candy Crush under the control of Microsoft Gaming.