Microsoft buys Activision Blizzard for $67.8 Billion
On January 18, Microsoft announced their plan to purchase gaming giant Activision Blizzard for $68.7 billion. The move would make Microsoft third-highest in revenue for video game companies globally — behind Tencent and Sony — with the addition of massive titles like “Call of Duty” and “World of Warcraft.” Also included under Activision Blizzard is King Digital Entertainment, the makers of “Candy Crush Saga,” which was acquired in February 2016 for $5.9 billion.
“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,” Microsoft Chairman and CEO Satya Nadella 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.”
In the announcement, Microsoft highlights that over 3 billion people play games globally and that “the $200+ billion gaming industry is the largest and fastest-growing form of entertainment.”
“Until this transaction closes, Activision Blizzard and Microsoft Gaming will continue to operate independently,” Microsoft Gaming CEO Phil Spencer said in a blog post. “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 catalog.”
Spencer also mentions in the post that Game Pass surpassed over 25 million subscribers, which costs $9.99/month for either the PC or Console Game Pass or $14.99/month for the Ultimate Game Pass. Unsurprisingly, most Game Pass subscribers would welcome the addition of potential Activision Blizzard titles to the service. “More bang for your buck,” as the saying goes.
However, the largest acquisition in Microsoft’s history was met with mixed reactions, not only due to antitrust concerns, but also regarding the sexual hassarrassment and toxic workplace accusations surrounding Activision Blizzard over the last year.
Scathing legal complaints against Activision Blizzard were filed through multiple regulatory bodies: the first coming from the California Department of Fair Employment and Housing in July 2021.
According to the lawsuit, a two year investigation revealed a “pervasive frat boy workplace culture” that constantly subjected female employees to sexual harassment, pay inequality and retaliation. The suit contained numerous harrowing details, but one of the standout allegations was the story (Content Warning) of a female employee who committed suicide during a company trip. It alleges this was “due to a sexual relationship she had been having with her male supervisor.” The suit alleges that the extreme sexual harrassment this female employee was subjected to included the sharing of a photo of her genitals during a holiday party.
Activision Blizzard denied the charges from DFEH, stating the company has “made significant changes to address company culture and reflect more diversity within our leadership team.”
“The DFEH includes distorted, and in many cases false, descriptions of Blizzard’s past,” a spokesperson for Activision Blizzard said.
Later in September, Activision Blizzard was hit with a federal investigation from the U.S. Securities and Exchange Commission and settled in a separate complaint from the Equal Employment Opportunity Commission for $18 million.
It was also later revealed that Activision Blizzard CEO Bobby Kotick had known for years about sexual misconduct allegations.
The horrifying scandals and allegations; the arguably lukewarm reception to recent titles like “World of Warcraft: Shadowlands” and “Diablo II: Resurrected;” and the delays of “Overwatch 2” and “Diablo 4” had many thinking the company was on the decline. Others pointed to the continued success of “Call of Duty” and “Candy Crush Saga” as indicators of the company’s good health.
Regardless of opinion, there is no denying Microsoft has the opportunity to set Activision Blizzard on the right track. Many questioned Microsoft’s purchase of Mojang and “Minecraft” in 2014 for $2.5 billion, but the game has continued to grow. Assuming the Activision Blizzard acquisition doesn’t get blocked, only time will tell how much of an uphill battle — if any — Microsoft has in turning around public opinion of the gaming icon.