Microsoft has agreed to acquire Activision Blizzard, adding Call of Duty, Warcraft, and more to team Xbox
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A comparison to previous purchases
This isn’t the first time Microsoft has moved to purchase games studios in an effort to shore up its own first party catalogue. Back in September of 2020 it announced its (now completed) intent to purchase Bethesda Softworks, home of The Elder Scrolls, Doom, Fallout, Prey and Dishonored franchises among others.
At the time its $7.5 billion deal seemed a real fortune. But it is absolutely dwarfed by the scale of the $68.7 billion Activision Blizzard deal. It’s a very different purchase of course – Bethesda offered prestige titles, released on a much slower cadence than the popular annualized franchises, mobile titles, and esports potential that the Activision Blizzard deal could offer.
As video game critic Alex Donaldson points out, Microsoft’s first party stable is now bursting with beloved gaming franchises. It’s come a long way in a few short years:
Fondly remembering the days when Xbox had to use a third party character, an unnamed man from a game that was ultimately cancelled, and CAR to promote their brand pic.twitter.com/gVj9io8uMDJanuary 18, 2022
Activision Blizzard games coming to Xbox Game Pass
Microsoft is planning to add as many franchises across Activision Blizzard to Xbox Game Pass as possible.
In a blog post on Xbox Wire, Spencer said: “Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog.”
The company has also revealed that it has now surpassed 25 million Xbox Game Pass subscribers.
Spencer also said that this acquisition will let Microsoft accelerate its plans for cloud gaming and stressed that the existing communities of Activision Blizzard titles will continue to be supported moving forward.
Regulators have their work cut out
It’s worth noting that this isn’t a done deal – Microsoft may have the audacious amounts of cash needed to pull this off, but it will first have to face the might of regulators and anti-competition evaluators before the purchase can be finalized.
As TechRadar’s interim EIC Lance Ulanoff points out:
Microsoft’s $68.7B acquisition of Blizzard could face an uphill battle with the FTC, which is no longer in a tech acqui-friendly mood. The fact that Microsoft announced it means it’s confident it’ll go through, but I’ve seen that confidence defeated before.January 18, 2022
However, with the key competition being Chinese (Tencent) and Japanese (Sony), perhaps the FTC will look more kindly upon the strengthening of two US technology institutions.
Kotick’s potential windfall
Should Activision Blizzard CEO Bobby Kotick be removed from his position, he’d make a huge amount of money, as per contractual terms relating to ‘Potential Payments upon Termination or Change of Control’.
As AXIOS journalist Stephen Totilo highlights, it could be close to a $293 MILLION payout – a figure still in play with the Microsoft purchase on the table:
If you thought Bobby Kotick’s 2020 income of $155 million was big, you should see what he’d make if Activision replaced him. (see highlight) pic.twitter.com/CWixrPr8TAJune 23, 2021
Microsoft’s Gaming Leadership Team
Microsoft has posted to its newswire, sharing how its Gaming Leadership Team looks in the wake of the new acquisition news. It’s interesting that, in the wake of the sexual misconduct allegations that have dogged Activision Blizzard in recent times, Bobby Kotick, CEO and figurehead for Activision Blizzard, is nowhere to be seen. Sure, there are many steps to take before any takeover or merger can be finalized, but it’s interesting that there’s presence of the beleaguered CEO, of whom many in the gaming community believe should step down from his role, in the statement.
Bobby Kotick statement
Activision Blizzard CEO Bobby Kotick has shared the following email with employees:
Team,
Today is an incredibly exciting day. As we continue our journey to connect and engage the world through epic entertainment, we will eventually do so as part of Microsoft. I am certain that our incredible talent and extraordinary games combined with our shared commitment to the very best workplace will enable us to grow in an increasingly more competitive race for leadership as gaming through the metaverse evolves.
How we got here and where we’re going
When you reflect on what we’ve built together, we have so much to be proud of. For the last 31 years, we’ve continuously shaped gaming through our commitment to deliver joy, fun, and the thrill of accomplishment.
We’ve transformed games into social experiences and enabled players to find purpose and meaning through the most engaging form of entertainment – our games. By doing so, we’ve created and entertained communities of hundreds of millions of players.
Connecting these communities together is the next step. Facebook, Google, Tencent, NetEase, Amazon, Apple, Sony, Disney – and many more – have ambitions for their own gaming and metaverse initiatives. Established and emerging competitors see opportunity for virtual worlds filled with professionally produced content, user generated content and rich social connections.
Our talent and our games are important components of the construction of a rich metaverse. We have always attracted the very best game makers and built the very best games, seizing opportunity with passion, inspiration, focus, and determination.
A partnership to define the future
As investments in cloud computing, AI and machine learning, data analytics, and user interface and experience capabilities are becoming more competitive, we believe this partnership will better enable our ambitions.
In considering possible partners, all roads ultimately lead to Microsoft. Like us, they have been making games for a long time. Microsoft has already distributed games to hundreds of millions of the world’s computers and computing devices and has technologies and innovation that will support the next generation of games.
Microsoft also will support our journey to further strengthen our culture. Satya Nadella, Microsoft’s CEO, has been a passionate advocate for caring as the currency of leadership. Inspiring people through empathy is a powerful motivator, and one we embrace as we renew our resolve – and in the work we are now doing – to set a new standard for a welcoming and inclusive workplace culture.
Importantly, Microsoft wants you – your talent, your creativity, and your dedication to each other. Activision Blizzard’s success throughout the years can be directly attributed to each of you. Microsoft recognizes the commitment to excellence and creative independence that sets us apart, and we anticipate minimal changes for our workforce following the close of the transaction. Microsoft’s diverse operations will give us access to valuable expertise, technology, and tools and provide even greater opportunities for learning and development.
No organization’s culture, including ours, is without need for improvement, and thanks to your input, we are making strides in improving ours. My commitment is to continue evolving our culture so that come closing, Microsoft is acquiring an exemplary workplace.
What’s next
Transactions like these can take a long time to complete. Until we receive all the necessary regulatory approvals and other customary closing conditions are satisfied, which we expect to be sometime in Microsoft’s fiscal 2023 year ending June 30, 2023, we will continue to operate completely autonomously. I will continue as our CEO with the same passion and enthusiasm I had when I began this amazing journey in 1991.
Of course, this announcement will give rise to so many questions. We will host numerous forums and events to make certain we address your concerns.
I am incredibly proud of this company, you, and the work we have done together. Now it’s on to our next chapter and the endless possibilities this transaction represents for us. I couldn’t be more appreciative of your efforts, focus, and the dedication to connecting the world through joy and fun.
With gratitude,
Bobby
Xbox boss Phil Spencer is, unsurprisingly, excited about the announcement.
As we extend the joy and community of gaming to everyone, we are incredibly excited to welcome the fantastic teams and iconic franchises of Activision Blizzard to Team Xbox https://t.co/DVrgYS8ssBJanuary 18, 2022
What does it mean for PS5?
Our senior gaming writer, Adam Vjestica says;
“One thing is for certain, even in these early stages of the deal: Xbox Game Pass will soon be home to more Activision Blizzard games in the future, with many likely to launch straight into the subscription service.
“That means the next Call of Duty could potentially be free to Xbox Game Pass subscribers, while PS5 owners will have to pay $70 / £70. It could also jeopardize any future exclusivity deals Sony had in terms of content, which has been the case for Call of Duty since PlayStation 4’s release in 2013.”
Microsoft confirmed it agreed to acquire Activision Blizzard for $68.7 billion on Tuesday 18 January 2022 at around 8.30am ET.
It’s massive news, not only in the amount Microsoft is paying, but also the big-name titles it’s acquiring.
BREAKING: The WSJ reports that Microsoft is buying Activision Blizzard, the troubled publisher behind Call of Duty and World of Warcraft, which has been facing crisis over the last year following numerous reports of sexual misconduct and discrimination. A seismic gaming dealJanuary 18, 2022
Refresh 2022-01-18T15:07:40.490Z A comparison to previous purchases This isn’t the first time Microsoft has moved to purchase games studios in an effort to shore up its own first party catalogue. Back in September of 2020 it announced its (now completed) intent to purchase Bethesda Softworks, home of The Elder Scrolls,…
