In its biggest push into the gaming industry, Microsoft announced yesterday that it will be acquiring Activision Blizzard in an all-cash transaction of $68.7 billion.
Once the deal is finalized, Microsoft is set to become the “third-largest gaming company by revenue, behind Tencent and Sony”.
Microsoft plans on adding various Activision games to Xbox Game Pass. The move will bring popular franchises from Activision, Blizzard, and King Studios, including Warcraft, Call of Duty, Overwatch, Candy Crush, Spyro, Diablo, and many more under the Microsoft Gaming umbrella.
Other popular PC, console, and smartphone titles will also be included, helping Microsoft grow its gaming business in different directions.
On the latest development, Microsoft’s CEO of Gaming Phil Spencer commented:
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.
As of January 2022, Xbox Game Pass has over 25 million subscribers, while Microsoft continues to acquire studios to boost the subscription service.
Microsoft CEO Satya Nadella also stated,
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.
Activision features close to 400 million monthly active players, with over 10,000 employees.
Once the deal is finalized, Microsoft will have 30 game development studios under its wing with over decades of experience in game publishing.
Controversial CEO to Remain at Activision
Bobby Kotick is expected to remain CEO of Activision Blizzard for the time being until the deal closes. After the transition period to Microsoft, Activision Blizzard will report directly to Phil Spencer as CEO.
Spencer further highlighted,
As a company, Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players. We deeply value individual studio cultures. 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.
Activision’s Issues
The deal comes only months after Activision Blizzard executives faced allegations of sexual harassment from former employees.
In July last year, the California Department of Fair Employment and Housing (DFEH) sued Activision Blizzard for promoting an environment of “constant sexual harassment.” More employees later came forward with allegations of sexual misconduct, with Activision eventually reaching an $18 million settlement in September with the US Equal Employment Opportunity Commission.
Various reports indicate that over 40 Activision Blizzard employees have already left the company. While dozens of executives were recently fired with many others reprimanded.
After a regulatory review and approval, the deal is expected to close later in the year. While the Board of Directors of both companies are already on board the acquisition.
