Announced this morning, Microsoft is set to acquire gaming giant Activision Blizzard for $68.7 Billion, bringing the Call of Duty and World of Warcraft publisher under their gaming umbrella. This move would make Microsoft the third largest game company by revenue behind Sony and Tencent.
The acquisition brings multiple studios from across Activision Publishing under the Microsoft banner, with Microsoft owning some of the largest franchises on the planet, including Call of Duty, Diablo and World of Warcraft.
Activision Blizzard will operate independently under CEO Bobby Kotick. However, once the deal closes the Activision team will report directly to Phil Spencer. IGN has reported that, as of now, Bobby Kotick will remain CEO of Activision Blizzard after the acquisition, though the companies will report to Phil Spencer as CEO of Microsoft Gaming. [UPDATE 10:05am PT] The Wall Street Journal is now reporting sources close to both companies that Kotick will step down following the acquisition.
"Bobby Kotick, Activision’s longtime CEO, is expected to leave after the deal closes, according to people familiar with those plans. Microsoft had said in its announcement Tuesday that Mr. Kotick “will continue to serve as CEO of Activision Blizzard,” and that after the deal closes “the Activision Blizzard business will report to Microsoft gaming chief Phil Spencer. ” But the companies have agreed that he will depart once the deal closes, the people said.
Original story continues:
Spencer in a separate blog post talked about what this deal meant for Microsoft, specifically as it pertains to mobile and Cloud gaming. With Activision Blizzard King's mobile division, this bolsters the work Microsoft was already doing in that space even more, and puts some of the most profitable mobile titles into Microsoft's portfolio.
Additionally, the acquisition means that many of Activision Blizzard's titles will reach Game Pass, which Microsoft announced today has more than 25 million subscribers. And once a weakness for Microsoft, the total first party studios in their portfolio will increase to 30, bnringing more game and publishing teams to Microsoft's game division.
While not directly addressing the current lawsuit which has rocked Activision Blizzard, Spencer does spend some time in his post talking about the company's commitment to inclusion, both with its players and employees.
"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."
In July of 2021, a California agency filed a lawsuit against Activision Blizzard, alleging the company had fostered an environment of sexual harassment and discrimination. Since then many high profile members of the company have been let go or stepped down, including former Blizzard president J. Allen Brack. Kotick, CEO of Activision Blizzard has been the subject of a number of reports stemming from the lawsuit itself with the Wall Street Journal alleging that the CEO knew about the alleged incidents and concealed or downplayed them.
Since the lawsuit dropped, leadership changes at Blizzard were announced, with Jen Oneal and Mike Ybarra being named co-leaders of the company. However, in November Jen Oneal stepped down her position at Blizzard, leaving Ybarra as the sole leader of the company. Oneal, for her part, it is reported she was paid less than her male counterpart at Blizzard and was subject to discrimination and tokenization while at Blizzard, according to the Wall Street Journal report in November.
The WSJ report also saw headlines of Phil Spencer stating (via Bloomberg) that they were "evaluating all aspects" of the relationship between Xbox and Microsoft. Since the reports have dropped, many Activision Blizzard employees have walked out in protest. Raven Software employees have now entered another week of a strike in reponse to the firing of 12 QA employees suddenly, many of which had relocated to Wisconsin at their own expense.
The deal itself isn't expected to close till fiscal year 2023, with the acquisition expected to go through the standard regulatory review. The deal sees Microsoft buying Activision Blizzard for $95.00 per share, the deal being handled in all-cash. This also isn't the first blockbuster purchase by Microsoft in recent years, who acquired Bethesda for $7.5 billion recently.