Microsoft has announced their intention to acquire Activision Blizzard King in a deal that values the monolithic publisher at $68.7 billion. This, Microsoft states, will help to ‘provide building blocks for the metaverse’, and is expected to be approved by regulators in FY 2023.
Activision Blizzard is the third largest video games company in how much revenue they draw in, behind only Sony and Tencent, thanks to their vastly popular and successful franchises like Call of Duty, Candy Crush and Warcraft, Diablo and Overwatch. They also have a sizeable position in esports, thanks to owning Major League Gaming, which hosts popular Call of Duty and Overwatch competitions.
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This leaves massive questions over what the future of video games looks like. With Microsoft’s acquisition of Bethesda for $7.5 billion in early 2021, ones of the biggest concerns was that all of Bethesda’s future games would become Xbox exclusives, a fear that turned out to be warranted. However, nothing that Bethesda produces has the reach and pervasiveness of Call of Duty or Candy Crush – not even Skyrim.
Will Microsoft be content to keep the next Call of Duty game as a cross-platform release? Will COD Warzone remain on PlayStation while Modern Warfare 2 becomes an Xbox exclusive? We simply do not know right now, but this is a huge deal.
Activision Blizzard comes with a significant stigma right now. The company is embattled on multiple fronts with lawsuits and government investigations into the workplace culture, as well as employees who are striking while also preparing to unionise. This has drawn stern criticism from the leaders of Xbox, PlayStation and Nintendo, so with that in mind, Microsoft acquiring the company could be a huge step forward in cleansing it of its unsavoury whiff.
Or it would do, except that Bobby Kotick will remain as CEO of Activision Blizzard. It’s just that he’ll now report to Phil Spencer of Microsoft Gaming instead of to his shareholders.
Speaking about the deal, Phil Spencer said, “Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them. Together we will build a future where people can play the games they want, virtually anywhere they want.”
Just last week, Phil Spencer said that he doesn’t believe it’s his job “to punish other companies” like Activision Blizzard for such misdeeds, though now that Activision will be part of his company, he needs to ensure that they are squeaky clean.
“For more than 30 years our incredibly talented teams have created some of the most successful games,” said Bobby Kotick, CEO of Activision Blizzard who allegedly knew of the allegations running through his company for years. “The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”
Considering the size of this deal, you can expect that it will draw much greater scrutiny from legislative bodies over the next few months. While the Bethesda purchase was waved through, this is much more significant and will have a higher barrier for success.
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