There has been a lot of discussion recently about Microsoft Studios’ acquisition of everyone’s favourite game company; Activision Blizzard. If the sarcasm there wasn’t clear, they haven’t exactly had the best reputation as of late.
They are currently facing some of the most egregious discrimination and sexual misconduct claims ever seen within the games industry, in the form of a lawsuit made by the California Department of Fair Employment and Housing. It details claims of a “frat boy” culture at the company as well as extensive accounts of sexual harassment. It has also been alleged in recent months that the CEO of the company, Bobby Kotick, has not only been aware of these claims but was a part of the culture himself. So, it’s safe to say that consumer’s opinion of them is currently at an all-time low.
They aren’t doing well on an analytical front either, with some of Blizzard’s most popular IPs on the decline. Their Q4 earnings call revealed a loss of around 5 million users during 2021 despite the additions of Shadowlands and Burning Crusade Classic to World of Warcraft.
And as much as it pains to me to say it, one of their other staple franchises, Overwatch, has lost the spark that it once had. With Jeff Kaplan’s departure, a massive drop in player base and the Overwatch League consistently proving itself to be the bad investment that it is, it becomes harder every day to remain a fan of the franchise. With that said, there is still a very active community of consumers out there who love Overwatch, and I do still genuinely believe that there is hope for the franchise, especially with news of this acquisition.
On that note, there are a lot of people questioning what the upcoming deal will mean for both companies and their respective IP’s. It’s clear that a lot of work needs to be done at the company to clear up its culture and move it in a better direction, so let’s take a dive into what the most important takeaways are from the press release.
The deal will not be finalised for another 2 years
One of the main things to note about this acquisition is that it will take a lot of time. A lot of people are probably excited for what this might mean for game pass but any potential additions to the game pass library won’t be ready for consumers for another couple years.
The deal is not expected to be signed and completed until some point late into the company’s 2023 fiscal year and that’s without any regulatory issues cropping up. There are antitrust regulations intended for acquisitions such as this, to prevent monopolies forming and to ensure that there is healthy competition in the marketplace.
Bloomberg reported last week that the Federal Trade Commission is going to be handling the antitrust review, saying that they will likely be looking at the portfolios of both companies to see how much a combination of the two will harm their rivals and restrict the ownership of games on the market.
Bobby Kotick will be staying on as CEO of Activision Blizzard
Microsoft confirmed in their press release that Bobby Kotick will in fact be staying on as CEO, regardless of the current accusations against him, stating that “he and his team will maintain their focus on driving efforts to further strengthen the company’s culture”. This is effectively their way of addressing the elephant in the room but only time will tell how things go in regard to sorting out the cultural issues at the company.
Once the deal closes, the business will report to the CEO of Microsoft Gaming, Phill Spencer. I am personally optimistic that he and the rest of Team Xbox can influence a positive change within the company, but we’ll have to wait and see how that clean-up process goes. The two year interim until the deal closes is also important to note because the Activision Blizzard lawsuit will have no doubt progressed a great deal by then and perhaps there will already be an improvement by the time Microsoft take the reins.
One of the other reasons that Kotick might not be being removed from his position, is the inordinate amount of money it would cost to terminate him for “Good Reason Following a Change of Control.” With the lawsuit still going on, it is of course not exactly clear how this pay-out would work, but it could be up to the amount of 292 million according to their 2021 proxy statement. Nothing totally unreasonable to see here, move along.
Xbox Game Pass is getting another buff
One of the best things for consumers about this whole deal, is that their favourite Activision Blizzard games will likely become available on Microsoft’s Game Pass for Xbox and PC. It’s only been a year since Microsoft acquired ZeniMax media and in turn Bethesda’s iconic set of games, which bolstered the already vast library of games available as a part of the subscription.
With Game Pass reaching a milestone of over 25 million subscribers and it being one of the most consumer friendly options for gamers in the industry, it’s easy to see how much this deal will benefit Microsoft in the long run. In their own words, they will end up with “one of the most compelling and diverse line-ups of gaming content in the industry.” This will also help them compete against Sony’s upcoming Game Pass rival Project Spartacus, which will likely end up containing any future Bungie content after Sony’s recent acquisition of the studio. The only main drawback for players will likely be the cost, as I would find it hard to believe that the Game Pass doesn’t jump up in price after all of this.
Microsoft will now own King
By acquiring Activision Blizzard, Microsoft will in turn own King, a dominating force in the market of mobile games. They made Candy Crush, which in and of itself is a microtransaction, money printing, cash cow heaven for any game company to take ownership of.
Mobile gaming is the largest sector of the industry and will only continue to grow, and with this deal it’s clear that Microsoft have every intention of using their IPs to help expand their presence in the mobile market: “Activision Blizzard will empower players to enjoy the most-immersive franchises, like “Halo” and “Warcraft,” virtually anywhere they want.”
I already hate the term metaverse
Microsoft are looking at how games and this acquisition will provide the “building blocks” of the metaverse. They aren’t wrong in saying this because videogames and their interactive nature will likely be a central pillar in any future virtual landscapes that unfold. So it seems like this is them hinting at their plans to get in on the ground floor of whatever the metaverse ends up looking like.
All in all, I think the acquisition will generally be a good thing for most consumers. As long as Phil and the clean-up crew over at Team Xbox implement meaningful change towards Activision Blizzard’s culture, and the American government stave off any worrisome business practices, then in a couple of years’ time we should all hopefully see a better version of both companies.
Pearce is a recent masters graduate with a passion for games. He thinks they can be seen as a form of art, conveying stories and narratives that can have an immense impact on players. Outside of game design, he has an interest in Twitch, music and animals.