20 January 2022
Microsoft has announced that it will acquire Activision Blizzard, one of the leading game publishers, in an all-cash deal of $68.7 billion. It is the company's biggest push in the gaming segment and as per the announcement, the deal will make it the world's third-largest gaming company in terms of revenue. Tencent and Sony are the two companies leading the market.
Activision Blizzard is home to some of the biggest video game franchises in the world. These include the likes of Call of Duty, Diablo, Overwatch, World Warcraft, and StarCraft. It further owns the mobile gaming giant King, well-known for the Candy Crush franchise. The deal also includes all eSports activities held by Major League Gaming. All of these popular games will be published by Microsoft when the deal closes, expected to happen around June 2023.
Microsoft's future plans involve adding as many Activision Blizzard titles as possible to the Game Pass portfolio. It covers both Xbox Game Pass and PC Game Pass which have now crossed 25 million subscribers. Since there are millions of users who love to play Activision games, there is a good chance they will convert into Game Pass subscribers.
In terms of management hierarchy, Bobby Kotick will continue to be the CEO of Activision Blizzard for the time being. All of Activision's business will report to Phil Spencer, CEO of Microsoft Gaming, after the deal closes. It is quite possible that Kotick will be relieved of his duties after a successful transition.
It is worth noting that Activision Blizzard is currently embroiled in legal troubles. A number of employees have come forward with sexual harassment claims against the company in the past year. It is claimed that the company's CEO knew about sexual misconduct incidents for years but did not take any action. Many workers have even called for Kotick's resignation citing the aforementioned reasons.