Microsoft signs the biggest check in its history to afford Activision Blizzard, one of the largest video game publishers in the world. An operation in the amount of 68.7 billion dollars which reveals the determination of the company of Satya Nadella to impose itself durably in the middle of the gaming. But which also gives food for thought on the toxic corporate culture of this environment, Activision Blizzard chaining scandals for months for practices of systemic harassment within its studios.
Less than two years after the acquisition of ZeniMax Media, the parent company of Bethesda , for 7.5 billion dollars, Microsoft announces the acquisition of Activision Blizzard for no less than 68.7 billion dollars. An insane sum which demonstrates once again that the American giant wishes to crush the competition with its financial power and to overshadow Sony and its PlayStation brand more and more. It also breaks Take-Two Interactive’s recent record with the acquisition of Zynga for $12.7 billion.
We are joining the @Xbox family.
— Activision Blizzard (@ATVI_AB) January 18, 2022
As we know, the video game market is not to be taken lightly. Microsoft, which is very seriously trying to get its act together after a lackluster Xbox One generation, proves it once again by spending no less than $68.7 billion to absorb Activision Blizzard.
If this gargantuan amount is enough to make you shed a tear, it is explained by Activision Blizzard’s status as the sixth largest publisher in the world (by revenue), behind Tencent, Sony , Nintendo , Microsoft and Netease. Outside of China , it is therefore the first independent publisher (not manufacturing a console).
Microsoft Becomes Third Largest Publisher In the World
If the takeover is validated by the regulators (it is expected to be closed in the 2023 fiscal year), Microsoft will become the third largest publisher in the world. It will obtain the flagship licenses such as Warcraft, Diablo, Overwatch, Call of Duty or Candy Crush, not to mention Activision’s e-sports activities (through Major League Gaming). He will also get his hands on the group’s 10,000 employees, located in various studios around the world.
The logic behind this acquisition is not hard to understand. The market has been consolidating for five years with successive takeovers, each major player seeking to perpetuate its stock of exclusive games. The beginning of Satya Nadella’s reign at Microsoft (in 2014) was placed under the seal of sobriety in terms of internal development studios, the idea being that hardware and services would be enough to attract players. A bad strategy that ended in a brutal fall against Sony and Nintendo, whose exclusive titles guarantee attractiveness and income.
THE AMBITION OF SUBSCRIPTION GAMING THROUGH THE
Microsoft cloud backtracked as early as 2018 and it now has at least 23 studios since it was grabbed Zenimax for 7.5 billion dollars at the end of 2020. By adding those of Activision Blizzard, it will go up to 30 studios. Enough to guarantee a continuous production of content to water its offer on PC (Windows), console (Xbox), smartphone and on the cloud.
Its subscription gaming service, Game Pass, has 25 million subscribers today, but the company’s ambition is much bigger. With 400 million active players each month, Activision Blizzard has something to help it in its quest. Microsoft also does not forget to make a small mention of the “ metaverse ”, of which it says that it sets up the constituent elements.
A Boyout Despite Harassment Issues Within Activision Blizzard
Most problematic in this story (besides the antitrust aspect) is the signal it sends to the industry, as Activision Blizzard has been in the spotlight for months over issues of discrimination and harassment (including and even especially sexual) systemic denounced by former and current employees. Several legal proceedings are underway in this regard and the company has already paid 18 million dollars last September in the context of such a complaint.
Phil Spencer, in charge of Microsoft’s Xbox division and known for promoting values of inclusivity and benevolence in the video game industry, expressed himself ambiguouslyabout the setbacks of Activision Blizzard and the past of Xbox studios, where some of the main defendants have made part of their career .
In addition, we note that Bobby Kotick, current leader of Activision Blizzard and widely implicated in a personal capacity as having allowed (even encouraged) his toxic corporate culture, will remain in office at least until the closing of the takeover. Its role is not subsequently mentioned, nor that of its management team. Microsoft only specifies that all the studios will report directly to Phil Spencer, who becomes CEO of Microsoft Gaming, the division becoming a company in its own right.