Microsoft to Acquire Activision Blizzard for $68.7 Billion

Microsoft’s $7.5 billion acquisition of ZeniMax/Bethesda in 2019 was shocking. I don’t even have words for the nearly $70 billion acquisition of juggernaut Activision Blizzard (which is in the process of closing).  

Microsoft’s interest in gaming cannot be understated. They went from the debacle that was the XBOX One, to acquiring some of the most storied franchises one console generation later. 

The Gaming Acquisition

You’d be hard-pressed to see a “top 10” games list on any platform and not see a handful of Acti/Blizz games present. Call of Duty is one of the most profitable ventures in gaming with its battle royale (Warzone) exploding in popularity through the pandemic. That’s not to mention the most popular franchises on the Blizzard side of the house (World of Warcraft, Diablo, Overwatch).

With its acquisition, they add the following studios to their ever growing list of talent:

The following franchises can now, potentially, be console exclusives should Microsoft see fit: 

Once the deal closes, there will be more clarity on the ramifications of the historical acquisition. One thing is for certain, Game Pass will be getting an injection of new titles… immediately. Xbox Wire’s post about the acquisition explained 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 catalog. We also announced today that Game Pass now has more than 25 million subscribers. As always, we look forward to continuing to add more value and more great games to Game Pass.”

In other words, Game Pass will easily become a must-have for anyone gaming on a Microsoft console or PC. As if it wasn’t already 

The Company Acquisition

With this acquisition, they also take on all of Activision Blizzard’s scandals. From being sued by the “State of California for their ‘Frat Boy Culture” to CEO Bobby Kotick reportedly knowing about sexual micsonduct allegations for years; Activision Blizzard was at a flashpoint within the industry. Hundreds of employees have staged walkouts across their studios, and we’ve seen various employees in HR positions within the company resign. The lawsuit is really the first of its kind that was served in the United States and certainly one of the biggest in gaming’s history.

At the crux of the issue is Activision Blizzard CEO, Bobby Kotick. If you were hoping, as much as all of us here at Dual Pixels were, that Kotick would be let go, I’m sad to say that is not the case… at least, not initially. The Activision Blizzard press release has stated that “Bobby Kotick 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,” the statement reads.

“Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.”

While not atypical of a buyout agreement to keep the current CEO, Microsoft will have to answer the valid questions that will come up with how they are going to work to make the gaming industry actually inclusive.

Dual Pixels Thoughts

From a Personal Perspective

It seemed that Activision Blizzard was starting on a decline, less so in their massive ability to generate revenue, and more so in the public’s eye with their policies that put women in danger at the workplace. Do I trust any tech company to ensure that women and minority employees are adequately protected? Not really, no. However, the California lawsuit will hopefully help force their hand in putting protections in place so that all employees feel safe. It will be interesting to see how the company culture evolves as Activision Blizzard gets folded into such a large company. 

As stated above, Kotick is staying on as of now. If that is the case for the future of the studio after the acquisition goes through, it would have to be stated as a massive failure. You cannot keep a person in the studio, let alone one with so much power, that hasn’t protected its employees. 

From a Gaming Perspective

I am of two minds on this one. As a Xbox Series X and Game Pass owner, I am over the moon. The influx of games coming to the service is astounding. I also wouldn’t be surprised to see a price hike soon. Also, could the acquisition finally encourage positive movement for Overwatch 2? The first Overwatch was an absolute juggernaut when released, but a couple years on, its popularity declined. It also didn’t help that there wasn’t a clear vision for what Overwatch 2 should be, and key members of the team resigned last year: notably Overwatch director Jeff Kaplan (early 2021), and executive producer Chacko Sonny (Sept. 2021). 

As for all of the other talented studios, I sincerely hope that they can delve into IPs other than Call of Duty. They are far too talented to be restricted to a singular IP. 

The other side of the coin is that consolidation is generally bad… albeit happening in every single industry. Ideally studios would be prosperous independently. This isn’t a possibility for all studios, but it wasn’t an issue for such a revenue-generating behemoth that is Activision Blizzard. Microsoft saw a way to generate an influx of talent and IP and opened up their checkbook. 

Such a purchase will certainly change the industry landscape, but I don’t see Sony nor Microsoft reactively buying studios. Sony generally acquired studios they’ve had long-term relationships with. They have also been acquiring smaller, talented studios to help pursue their ventures in pc ports. Nintendo has such a diverse IP set that their acquisitions are generally talent focused, as opposed to Microsoft where their focus is acquiring well-beloved IP on top of talent injection.

Final Word

A random Tuesday press release will have industry-wide ramifications. This was totally unexpected and not a peep was rumored about the massive deal.  Microsoft has been on a tear of acquiring talent and IP but it all comes down to how they manage IP and their workforce. I hope we look back at this moment as one where a tech company helped to right the wrongs of another. I fear we will look back and see solely a penny-moving venture.