Microsoft Announces Plans To Acquire Activision Blizzard For $68.7 Billion
Despite the latter’s ongoing controversies, Microsoft has announced a purchase of Activision Blizzard to the tune of $68.7 billion.
According to an official announcement released on January 18th, Microsoft will acquire the video game publisher for “$95.00 per share” in a deal that’s set to make the Xbox parent company “the world’s third-largest gaming company by revenue, behind Tencent and Sony.”
As noted, this acquisition will put such popular series series such as Call of Duty, Candy Crush, World of Warcraft, Diablo, and Overwatch under the control of Microsoft.
Meanwhile, current Activision Blizzard CEO Bobby Kotick, who has found himself the target of widespread derision in recent months for his handling of the ongoing sexual misconduct and workpalce harassment accusations leveled at his company, “will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth”.
However, “once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.”
This massive purchase appears to have been done with a large focus on the potential metaverse of video games, with company CEO and chairman Satya Nadella writing in the announcement, “Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.”
“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,” he added.
Game Pass is also planned to include bringing Activision Blizzard games to its 25 million subscribers. The transaction will be fully closed in fiscal year 2023.
The move is surprising given Activision Blizzard’s recent history, as the company has torpedoed its reputation with numerous PR disasters in recent years, but it’s that exact history which may have driven the buyout.
The first of many came in October 2019 when Blizzard banned Hearthstone Grandmaster Blitzchung and stripped him of his winnings over his support for Hong Kong’s independence from Chinese overreach.
This led to near-universal backlash from not only players, but even a bipartisan selection of US senators, to the point where then-Blizzard President J. Allen Brack eventually apologized for “moving too quickly” on the matter at that year’s entry of Blizzcon.
January 2020 saw the launch of Warcraft III: Reforged, which infuriated fans with its broken promises, poor graphics, removed features, and the forced upgrading of all previous versions to the new and not-so improved version. The game quickly became the lowest user-rated on Metacritic for a time, and still currently stands as the second lowest just behind Madden NFL 21.
In March of that same year, a wide swath of players objected to the news that controversial philanthropist George Soros invested $45 million in Activision Blizzard, wary of why the political influencer would take interest in a video game publisher.
In July 2021, Activision Blizzard was sued for in sexual harassment and discrimination lawsuits by the California Department of Fair Employment and Housing, with Blizzard staff even staging multiple walk outs in support of the company’s accusers [1, 2].
Fresh claims then began to came out nigh-monthly thereafter, including one purporting that Kotick may have not only allegedly had knowledge of the allegations but also made threats to his own accuser. The situation surrounding these accusations is still currently ongoing.
Even amid reports Kotick was allegedly considering leaving the company if its problems were not solved swiftly, Activision Blizzard’s board of directors stated in November 2021 that despite these accusations, as part of their commitment “to the goal of making Activision Blizzard the most welcoming and inclusive company in the industry,” they wish for Kotick to remain on as CEO.
These controversies, along with the poor reception of such recent titles as World of Warcraft: Shadowlands, Call of Duty Vanguard [1, 2, 3, 4 5], and Call of Duty Warzone [1, 2, 3], have resulted in Activision Blizzard losing an admitted 29% of its players over three years.
Curiously, in an alleged internal email to Microsoft staff in November 2021, Spencer stated he and other leaders in Microsoft Gaming were “disturbed and deeply troubled by the horrific events and actions” at Activision Blizzard, and as such, were “evaluating all aspects of our relationship with Activision Blizzard and making ongoing proactive adjustments.”
“This type of behavior has no place in our industry,” Spencer further wrote in the email.
Ye, though the phrasing of that statement seemingly implies a desire to put distance between themselves and Activision Blizzard, Microsoft’s purchase of the publisher has only brought the latter closer into the fold.
At this time, no comments have been made on how policies will change at Activision Blizzard.
Microsoft acquired Bethesda parent company Zenimax Media in September 2020, adding to their portfolio of prior acquisitions, which include Double Fine Productions, inXile Entertainment, Obsidian Entertainment, Ninja Theory, Undead Labs, Compulsion Games, Playground Games, and more.
How many more companies can Microsoft handle under its belt? Was acquiring Activision Blizzard a smart decision? Let us know what you think on social media and in the comments below.
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