For the last several years, Microsoft has been on a game purchase spree, seeking to give its Xbox and Game Pass platforms an advantage against Sony’s PlayStation, which continues to dominate with exclusive titles. ZeniMax (AKA Bethesda), Minecraft creator Mojang, Id, Obsidian, Ninja Theory, Rare, Double Fine, and 343 Industries were among the major firms bought by the corporation earlier. But the computing behemoth’s next acquisition is so significant that it might rock the game industry’s foundations: Activision Blizzard.
The revelation comes as part of an official release from Microsoft, which features some of the company’s most popular gaming franchises, including World of Warcraft, Call of Duty, and Candy Crush. The deal is worth $68.7 billion, with Microsoft paying $95 a share for Activision Blizzard stock. A promotional website, press release, blog postings, open letters to staff, and even a map of the planned management team are all being used to promote the merger.
If approved, the roughly $70 billion deal would be the biggest in gaming history, with Take-purchase Two’s of Zynga earlier this year coming in second at “only” $12.7 billion. For the purpose of reference, Nintendo’s current market capitalization is about $55 billion in US dollars.
Activision is one of the industry’s oldest game publishers, having launched in 1979 with titles such as Pitfall, Little Computer People, MechWarrior, and Tony Hawk’s Pro Skater. The publisher has withstood several crashes and booms to become one of the world’s leading software producers. In 2008, it merged with Vivendi to become Activision Blizzard, earning power as a result of its relationship with the highly regarded creator of Warcraft, Starcraft, and Diablo. Activision Blizzard now produces and maintains some of the most well-known properties in the business, including Call of Duty, World of Warcraft, Crash Bandicoot, and Overwatch.
Above the past several years, the united Activision Blizzard has had major problems, caught in a widespread backlash against huge publishers that prioritise profit over quality and abuse their employees. Employee abuse and “crunch” culture, sexual abuse of female staff members (including a highly public investigation by the state of California), lack of accountability for executives, and embarrassing episodes such as an apparent capitulation to the Chinese government when a player displayed a pro-Taiwan message on stream have all been targeted by AB.
The company’s problems seem to have been embodied in multibillionaire CEO Bobby Kotick, who has been in charge for almost 30 years. According to a Wall Street Journal investigation, Kotick was aware of workplace harassment but did little to address it, sheltering abusive executives and even threatening to murder one employee. Despite demands from across the industry for him to stand down, including rare rebukes from partners like Microsoft, Sony, and even LEGO, Kotick continues to lead the company. According to a press statement from Microsoft, Kotick will stay in his job for the time being, reporting to Phil Spencer, Microsoft’s Gaming CEO.
Microsoft’s desire in one of the world’s top publishers is clear. It’s seeking to build a platform of streaming games that can be accessible anywhere on any device, in addition to augmenting a growing library of exclusive gaming material for the Xbox system and Windows. The Xbox Game Pass’s all-you-can-eat nature, analogous to Netflix, is shaking up the industry in ways that are yet unclear – other firms such as Amazon and Google have invested in game streaming, and Sony is apparently working on its own similar programme. Sony’s position at the top of console gaming, although dominating with exclusive games in the PS4 era, seems increasingly insecure as Microsoft continues to enhance its first-party library.
Various regulatory bodies, including the American Federal Trade Commission (perhaps even the Department of Justice) and the European Union’s Commission, must still approve the deal. Microsoft’s game-changing acquisition is far from a done deal, since both the US and EU governments are significantly less receptive to mega-mergers than they have been in the past.
Michael is a former graphic designer who has spent more time than he likes to admit constructing and customising desktop PCs. In no particular order, he enjoys folk music, football, science fiction, and salsa verde.
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