Microsoft have gone and done it again, announcing the intended acquisition of Activision Blizzard in a move that will have a potentially huge impact on the future of the games industry. What does this really mean though? Will Call of Duty now be an Xbox exclusive? The Deal of the Century? First things first, the deal itself is huge. Microsoft and Activision Blizzard’s respective boards have agreed to a sale worth a whopping $68.7 billion. That’s just stupid money. That’s the kind of money that we used to only really see with the fundamentals of everyday life, when mobile phone companies merge or separate, when energy companies combine, when car manufacturers or pharmaceuticals unite. That thinking is old hat now. The tech and entertainment companies are coming and they want to own… stuff. Just all the stuff, please. Yeah, more stuff. Who doesn’t love having loads and loads of stuff? Disney certainly likes having stuff, having picked up Marvel on the cheap and turned its properties into a never-ending stream of films and TV shows, then snagged Star Wars for a now laughably small $4 billion, and eventually setting its sights on beefing up its new streaming service by acquiring media rival 21st Century Fox for $71.3 billion in 2018. In the realms of video games, we have widespread investment from Chinese conglomerates, we have Embracer Group buying up everything in sight, and Sony and Microsoft both seeking to expand their first party studios. $68.7 billion might feel like a huge sum for Activision Blizzard, but it’s actually a good deal for Microsoft. ABK has exploded in value over the past decade, making it a part of the S&P 500 index which charts the 500 biggest companies in the US. This time last year, Activision Blizzard’s market cap was about to hit an all-time high of $80 billion on 12th February 2021, though typically hovering around $70 billion for the first half of the year. It hasn’t stayed that way, though. Something happened around the middle of 2021 that saw the company’s valuation slide from that $70 billion mark to under $50 billion. Part of that is purely financial – delays to game releases from Blizzard amongst them – but another part is the scandal that has surrounded the company like someone filled Bobby Kotick’s pockets with rotten eggs. How can Microsoft make this money back? Simply put, they don’t need to. Activision’s 2020 revenue was $8 billion, but their operating income was $2.7 billion. At that rate, it would take 25 years to make the money back… but that’s really beside the point for Microsoft. This is about key, strategic content that gives them a further competitive advantage in a growing market. Oh, and Microsoft had $120 billion in the bank in 2020 and an operating income of $70 billion in 2021. They have plenty left over… Will he stay or will he go? Microsoft’s willingness to acquire Activision Blizzard means that they’re prepared to take on the job of cleaning up its reputation. For the time being, the company will continue to be run as normal by CEO Bobby Kotick and his team as they navigate lawsuits, striking workers and unionisation efforts. They have to carry on business as usual until the deal is approved. While the company has taken steps, ousting over 40 individuals in recent months for transgression, declaring a zero tolerance policy, and promising to make contracted workers full time, there’s still more work to be done. Kotick himself is a part of the problem, having previously drawn criticism for cutting the company’s workforce despite record profits in 2018, and also having allegedly been aware of allegations and done nothing to address them. The wording of the deal’s announcement states that Kotick will carry on, though certainly leaves the door open for him to leave as soon as the purchase is approved and completed or after a transition period. His position and reputation don’t feel tenable as a part of Microsoft and reports suggest that he is to leave after any deal is concluded. I’m sure some will be hoping the door hits him on the arse on the way out. Will everything go Xbox exclusive? Maybe? We just don’t know at this point, with Phil Spencer’s only comments so far being that he hopes to bring as much of Activision’s back catalogue into Xbox Game Pass as soon as possible. However, we can look at the company’s track record here. For one thing, Xbox has allowed recent acquisitions to see out their various contracts and obligations, from Psychonauts 2 coming to PS4 and Deathloop being a timed PS5 exclusive. Additionally, existing game releases have also been allowed to continue on, so Minecraft is available on every platform imaginable. However, exclusive content drives attachment, and that’s why Bethesda’s Starfield will be exclusive. Looking at Activision’s portfolio, we can speculate that they’d pick and choose different approaches depending on the game and franchise. Call of Duty: Warzone is a free-to-play offshoot that needs to reach as many people as possible, but that could go hand in hand with future paid games in the franchise becoming Xbox exclusive. Similarly, Overwatch 2’s unusual release plan as a semi-expansion to Overwatch could get the blue light to come to PlayStation, as it’s building on an already released game. Diablo IV, though? Bet on that being an Xbox exclusive if the release comes after the finalised acquisition. The one thing we can definitively say is that everything will be thrown into Xbox Game Pass. Will we get the “old” Blizzard back? And what about Activision? In a word, no, but first I have to explain the question. Many fans have become disillusioned with some of the decisions that Blizzard have made over the past decade. There’s a feeling that the company has become too corporate and lost touch with its fans when announcing things like the mobile-only Diablo Immortal, the disappointing rushed release of Warcraft III: Reforged, and subsequent disbanding of the team that worked on it. There’s no putting a genie like that back in the bottle, and considering some of the rot that was revealed last year, I don’t think we want that genie back. Blizzard will still remain a part of Activision Blizzard, which will be a separate division under Xbox, but there might not be the same push to hit release targets that could help restore some of the “when it’s ready” ethos that led to them striking gold with World of Warcraft and Overwatch. Similarly, the pressure could be lifted on Activision’s Call of Duty content mill. Needing a new COD every single year means that Activision now has pretty much every one of their studios making content for this franchise. That’s a crying shame when Toys for Bob has just shown what they can do with Crash Bandicoot 4, and Vicarious Visions (now a part of Blizzard) revived Tony Hawk’s Pro Skater 1+2 to great acclaim. Microsoft’s acquisitions so far have been to secure a diverse portfolio, and on the Activision side of the company, that’s not currently what’s happening. Will the acquisition be approved? This is the big question, and while there is increasing scrutiny over tech companies making huge purchases like this, I can’t see it being blocked by the European Commission or the US Securities and Exchange Commission that will be looking into the impact that this will have on the games industry. In particular, they’ll be looking at the rulings they received when acquiring Bethesda. Yes, the deal is almost ten times the size and the revenue that Activision Blizzard generates is much greater, but the argument will be that this does little to nothing to harming the diversity of games on offer across the industry and across competing platforms, and that Microsoft aren’t buying an erstwhile competitor. PlayStation will likely remain the dominant platform for the foreseeable future… though if Call of Duty goes X
box exclusive, who could say what the future holds?
In a move that will shake the gaming industry to its core, Microsoft is on course to buy Activision Blizzard for a reported figure of $68 billion. This means that incredibly popular properties such as Call of Duty, World of Warcraft, Diablo, and Overwatch, would be owned by Microsoft. You could argue that those last two franchises aren't a huge pull on PlayStation — and obviously World of Warcraft is a PC gig — but there's no getting away from the fact that millions of gamers buy consoles for little more than their yearly Call of Duty escapade.
There's also no getting around the fact that this deal is a huge blow to Sony (and not just because Crash Bandicoot is now an Xbox mascot). First with the acquisition of Bethesda in 2020, and now with the all-but-approved buying of Activision, it could be argued that Microsoft is monopolising the industry as we know it — and Sony simply doesn't have the cash to compete on that front.
Microsoft is buying video games Activision Blizzard for $68.7 billion. If approved, the acquisition would bring together two giants of the video gaming world but [...]
Microsoft have shocked the gaming world with a planned buyout of Activision Blizzard for nearly $70 billion. The move will retain most of the leadership...
Microsoft has agreed to acquire publisher Activision Blizzard, the technology giant has announced. The deal is valued at $68.7bn (~£50.5bn), according to a report by Reuters. RELATED: Blizzard President J. Allen Brack steps down Microsoft has announced that both entities will continue to operate independently until the transaction closes. A company-wide email posted on the Activision […]
Microsoft has agreed to acquire Activision Blizzard in "an all-cash transaction valued at $68.7 billion". If approved, the deal would give 'Team Xbox' full ownership of iconic IPs such as Call of Duty, Warcraft, Diablo, and many more, and grow its head count by almost 10,000. The story first broke at the Wall Street Journal and was followed by a corroboration at Bloomberg's The Terminal. Microsoft Gaming CEO Phil Spencer has since confirmed the acquisition himself on the Xbox Blog. "It is incredibly exciting to announce that Microsoft has agreed to acquire Activision Blizzard," Spencer writes. "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 catalogue. We also announced today that Game Pass now has more than 25 million subscribers. The fantastic franchises across Activision Blizzard will also accelerate our plans for Cloud Gaming, allowing more people in more places around the world to participate in the Xbox community."
In a recent report by Inverse, the outlet spoke with both former and current Activision Blizzard employees about the company's working conditions as well as the ongoing strike. Jessica Gonzalez, the founder and organizer of ABetterABK (A Better Activision, Blizzard, and King), says that despite requests for the QA team to meet with leadership to discuss the ongoing crisis, leadership "hasn't opened a dialogue" with the workers. Her claim was then backed by two current Raven Software employees, both of which chose to remain anonymous.
“QA has not been involved in any of these discussions,” the first employee told Inverse. “Our request to meet with leadership has been met with radio silence.”
The second employee then expanded upon the comment, stating:
“Activision’s silence is something we expected, but were nevertheless disappointed to see. The company continues to publicly state how it wants to develop a clear line of communication between management and employees while actively going against its claims of transparency behind closed doors. ABK is not looking to change its toxic ways and improve the company culture anytime soon.”
The article also delved into the general mistreatment many QA testers experience in the industry, from grueling hours and crunch to not being offered benefits, stability, or proper recognition for their work. According to another anonymous source, "Many testers stay with the company for years but are forced to take unpaid breaks between contracts so they can legally remain ‘temporary employees.’ Temporary contracts do not include the benefits or bonuses given to regular full-time employees. QA workers are stuck working full-time hours and frequent overtime, doing vital work for the development process without ever receiving the benefits that are given to other departments.”
Unfortunately this report is merely the latest development in lengthy timeline of corporate wrongdoings by the company behind Overwatch, Diablo, World of Warcraft, Call of Duty, and countless other titles. Since July 2021, Activision Blizzard has been under investigation due to numerous reports of sexism, discrimination, and unethical working conditions made against the company. While some members of leadership have stepped down from their positions, CEO Bobby Kotick remains in power at the company--despite claims that he actively covered up workplace harassment as well as threatened a female coworker.
As a gamer myself, I spend a lot of time (too much probably) imagining what the future of gaming will look like. I do have to admit that I have been very disappointed in the slower than expected advancement of gaming technology over the past 20 or so years. I remember playing Super Mario 64 […]
