Microsoft didn’t start out as a gaming company, but it’s been 20 years since it launched the first Xbox and it’s only becoming a bigger part of the industry. With its recent acquisition of ZeniMax complete, Microsoft is scooping up another gaming heavyweight: Activision Blizzard. Microsoft says the $68.7 billion deal will make it the third-largest gaming company in the world after Sony and Tencent.
Bringing Activision Blizzard into the Microsoft family will give Redmond control of some of the most storied franchises in modern gaming, including Diablo, Call of Duty, Starcraft, and Warcraft. The deal also includes mobile developer King, which became part of Activision Blizzard in 2016. So, Microsoft will own Candy Crush, which is still more popular than you’d expect.
This deal comes as Activision Blizzard is going through a reckoning brought by an alleged culture of harassment and misogyny. The California Department of Fair Employment and Housing filed a lawsuit against the company last summer, and all the stories that have come out of the investigation support employee claims that management knew for years about the hostile environment and did nothing. In recent weeks, several dozen employees have been fired for misconduct, but many point to CEO Bobby Kotick as the real problem at Activision Blizzard.
Kotick won’t be getting his comeuppance with the Microsoft deal. He will continue running the company as a Microsoft subsidiary similar to ZeniMax, at least for now. Activision Blizzard will be under the purview of Phil Spencer, the head of Microsoft Gaming. It’s possible Kotick could leave after the transition period, but he’ll hardly be destitute—anyone who owns a lot of stock in Activision Blizzard will be making bank on the deal. Microsoft has agreed to pay $95 per share for the company, a substantial premium over the $65 price at the end of last week.
Microsoft has already noted that it plans to begin adding Activision Blizzard titles to Xbox Game Pass, making that subscription service even more appealing. Currently, it offers more than 100 games for download, plus you can stream games from the cloud (previously known as xCloud and now Xbox Cloud Gaming) to myriad devices like underpowered laptops and phones. This puts Microsoft even further in the lead compared to Google Stadia and Amazon Luna, both of which have smaller libraries populated mostly with indie games.
The ZeniMax deal gave Microsoft access to Bethesda content for Game Pass, and the company has now announced that the upcoming Elder Scrolls will be exclusive to PC and Xbox. This indicates a similar fate could be in store for Activision Blizzard’s most important franchises.
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