In what was a big surprise to some in the industry, Microsoft announced this morning that they had entered into an agreement to purchase Activision Blizzard. The companies have agreed to a $68 billion sale that will see the entirety of Activision Blizzard reporting directly to Microsoft Gaming CEO Phil Spencer. The move is not a huge surprise considering the implosion that has been happening over at Activision thanks to a series of revelations about inappropriate behavior within the company.
What does it mean?
There's a lot to unpack here. The biggest thing that will happen is that the majority of the games in the Activision Blizzard library will be made available as part of Game Pass. This includes some of the largest gaming franchises, including Warcraft, StarCraft, Diablo (a new title is currently in the works), and Call of Duty. This addition means that Xbox Game Pass and PC Game Pass will now have games from some of the biggest names in the industry: 343 Industries, Activision Blizzard, Bethesda, EA, Mojang, Obsidian, and more.
The purchase also means that the company owns games from one of the top mobile game developers in the world: King (which was acquired by Activision in 2015). Potentially more importantly, it gives Microsoft access to a very talented mobile development house. Microsoft Gaming has struggled in mobile, killing off some great games (Minecraft Earth and Gears POP!) in recent memory. With the addition of a dedicated mobile team, we might see these types of games given a chance in the market.
Why is this happening?
When the issues within Activision Blizzard began to come to light, many in the industry expected that it would spell the end of the company as an independent entity. Sexual harassment, possible sexual assault, and other cultural issues have put the company in the hot seat. The company changed the name of an Overwatch character that was named for a problematic employee. The state of California sued the company over the issues. Investors and employees have called for the ouster of the CEO. The stock price has been in free-fall (until today).
Within our organization, there has been a lot of discussion about what the future of the brand might look like. After having to constantly address the issues within the corporate culture, it was clear to us that Activision Blizzard could not continue to exist on its own. The problems ran too deep to be able to oust everyone without structural collapse. CEO Bobby Kotick and upper management all needed to go. The only way for this to happen was with an acquisition by a large company. Internally, we believed that Microsoft was the only option.
Activision Blizzard is a massive company with studios galore. Outside of a company like Amazon, Apple, and Google, who have toyed with gaming but never taken a big step into the space, Microsoft was the only company with the money, interest, and infrastructure to take on the challenge. While the announcement said that Kotick would stay on as CEO, after the purchase was completed, everyone would report directly to Phil Spencer.