Microsoft has announced plans to acquire Activision Blizzard. Call of Duty, World of Warcraft, and Diablo are popular games that are known to be published by the gaming giant. For months now Activision Blizzard has been in troubled waters from investors over sexual harassment controversies and ongoing executive turmoil. The acquisition by Microsoft seem like an escape for the gaming giant as it agreed to be acquired for about $68.7 billion all-cash deal, inclusive of the company’s net cash.
This deal is considered to be one of the biggest deals to have featured in the gaming space. Actually the “third-largest gaming company by revenue, behind Tencent and Sony.” The value of the deal is said to be far in excess of the $26 billion Microsoft pushed into the acquisition of LinkedIn in 2016. It also comes a year after Microsoft bought another influential gaming company, Bethesda for $7.5bn. The deal would be a major step for Microsoft’s Xbox gaming brand within the gaming space as its battle against Sony’s PlayStation.
Microsoft’s CEO of Gaming Phil Spencer has revealed that “Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalogue.“ This means once the deal is done and dusted, Activision’s games will now automatically be added to Xbox Game Pass. Franchises like Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush as well is now expected to be published by Microsoft.
In a blog post, while indirectly addressing the unrest that has plagued the gaming giant, Spencer says “As a company, Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players.” Spencer wrote says “We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect. We hold all teams, and all leaders, to this commitment. We’re looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard.”
According to Microsoft CEO Satya Nadella, “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’s deal with the gaming giant comes a few months after sexual harassment claims were raised. In July 2021, legal actions were taken by the California Department of Fair Employment and Housing (DFEH) against Activision Blizzard for promoting a culture of “constant sexual harassment.” In September of the same year, more employees raised more allegations of sexual misconduct the company had to reach an $18 million settlement with the US Equal Employment Opportunity Commission. That settlement is still being appealed, and reports have it that nearly 40 employees of Activision Blizzard have “exited” the company since July for one reason or the other.
Microsoft hasn’t given exact details of how it plans to approach issues arising, but the company says Bobby Kotick will remain as CEO of Activision Blizzard. Once the deal is fully sorted, chances of Kotick returning are quite low, after the transition to Microsoft, the company says the Activision Blizzard business will report directly to Spencer. Though Spencer was formerly head of gaming at Microsoft, now CEO of Microsoft Gaming.
Microsoft expects everything about the Activision Blizzard deal “to close in the fiscal year 2023,” this means that we might have to keep our fingers crossed to see these deals approved for up to 18 months. That’s a really long time for one deal to come to conclusion, given that Activision Blizzard operates in a number of markets, regulatory approval may seem more complicated than usual for Microsoft.