Microsoft’s extraordinary acquisition of Activision Blizzard is the biggest gaming news of 2022 so far, and a huge statement of intent from the tech giant about gaming: Once a subsidiary of Microsoft, it now feels like one of its core strengths. Xbox is currently gaining momentum, mainly thanks to Game Pass and a steady stream of acquisitions, big and small, and once the Activision Blizzard acquisition is complete, Microsoft will become the third largest gaming company in the world (behind Tencent and Sony).
The news was kept silent until it was announced, and people in the gaming industry have been reacting. While it’s a bit odd to start with the final internal reaction, Microsoft CEO Satya Nadella’s statement stands out for its emphasis on workplace culture, showing how well Microsoft understands the potential pitfalls here. The ongoing lawsuit against Activision Blizzard is definitely a factor in these conversations, and if I were a gambler, I’d put my house on Kotick and try to settle them before the acquisition was completed.
Together with @ATVI_AB, we will usher in a new era of gaming that puts players and creators first, making games safe, inclusive and accessible to all. https://t.co/fF2Ig3gSfxJanuary 18, 2022
Aaron Greenberg, the general manager of Xbox, spent only a short time with Microsoft, claiming that all he heard from the Activision Blizzard team was positives—and, of course, he would say so.
Love the focus from Satya and Phil, proud of the team and culture we have at Xbox/Microsoft. It’s been encouraging to hear so much positive information from the people working inside the Activision Blizzard team, and they’re very excited about what this means for their future. 💚 https://t.co/MtrxZZh019January 18, 2022
Another view comes from the Blizzard King Workers League, which says it remains “committed to improving workplace and employee rights” regardless of who controls the company financially.
Regardless of the company’s leadership structure, we will continue to drive #EndAbuseInGaming and appreciate the tremendous support we have received over the past year. (6/6)January 18, 2022
A big focus of the reaction was Bobby Kotick, who, in general, will see executives at Activision Blizzard get paid hugely against the backdrop of a string of harassment and workplace lawsuits.
Indie developer Rami Ismail is one of those who think Kotick can’t stay in power because of the recent scandal. Ismail’s suggestion of firing Kotick seems highly unlikely, but it is likely that after the transition period, the longtime Activision CEO will step down.
I do think that unless Kotick leaves before the acquisition closes, or he gets fired on day one, it’s going to be a real shame for Microsoft. Buying such a company in this situation and not changing anything while in your control is also a statement.January 18, 2022
The press release does hint that this might be the plan: “Bobby Kotick will remain CEO of Activision Blizzard […] Once the deal closes, Activision Blizzard’s business will report to Microsoft Gaming CEO Phil Spencer. In addition to that, The Wall Street Journal reported that its sources said Kotick Will exit after the transaction is completed.
The broader context of the acquisition is Game Pass and Microsoft’s goal of reaching gamers across all devices. As industry analyst Daniel Zhuge pointed out, this is something Microsoft has been working towards for years.
Microsoft’s approach to gaming is a reminder of its M&A strategy As the value of IP, content and talent grows, the Xbox business is betting on ensuring it can increase the value of Game Pass and reach all players on all devices pic.twitter.com/pDrWKysgzZJanuary 18, 2022
Perhaps the most compelling aspect of the acquisition is the amount involved: It’s hard to even start putting your head around $68.7 billion. Bloomberg’s Jon Erlichman puts this in the context of Microsoft’s other acquisitions, which are the largest to date.
Microsoft’s biggest acquisitions: Activision Blizzard: $68.7 billion Linkedin: $26.2 billion Nuance: $19.7 billion Skype: $8.5 billion ZeniMax: $7.5 billion GitHub: $7.5 billion Nokia Mobile: $7.2 billion aQuantive: $6.3 billion Mojang ( Minecraft): $2.5 billionJanuary 18, 2022
One obvious thought from this acquisition was: wow, Sony is in trouble! Obviously PlayStation isn’t going away anytime soon, but Microsoft’s momentum is undeniable, and one element of the deal is its chance to acquire some IP that’s closely tied to PlayStation’s history.
Microsoft now has some of PlayStation’s most iconic characters, which is crazy to me pic.twitter.com/0QqDg4Ak6pJanuary 18, 2022
Before Zenimax, which was eventually acquired by Microsoft last year, id was almost bought by sight, according to id co-founder John Carmack.
Before the end with Zenimax, Id Software was almost acquired visually. Interestingly, both paths will eventually lead to Microsoft. @BobbyKotick has been supportive, it’s an amazing achievement to be able to lead a company to such tremendous growth over such a long period of time. https://t.co/Yov7kI2eO4January 18, 2022
Former Microsoft employee and Xbox co-founder Seamus Blackley noted that the “metaverse” aspect of the deal was overemphasized by some media outlets.
Interestingly, these stories treat it as about the metaverse rather than an actual, lucrative video game business. This is normal. Games are for kids. In the current Metaverse, this is the real victory. It might even have income someday. https://t.co/kCtWxPY9C8January 18, 2022
Blakely went on to add: “I firmly believe [Phil Spencer] as leaders and performers. I think it’s a very insightful move that could represent a huge win for Xbox. All big acquisitions have tough challenges, I just think the developer culture issue matters most here. “
And the various dormant IPs Microsoft has acquired: some high hopes here, though I wouldn’t be too excited about the Pitfall remake.
Hey, do you know what’s cool about this acquisition? Hexen and Heretic now belong to Microsoft, and Microsoft has the right to return them to Raven.January 18, 2022
Meanwhile, indie developer Crows Crows Crows is optimistic about his prospects.
Microsoft just bought us too pic.twitter.com/8SIWewT1RlJanuary 18, 2022
A Hearthstone designer was curious about the crossover potential.
And some other good jokes. Clips in Overwatch!
Overwatch after Microsoft buys Activision Blizzard pic.twitter.com/SodkEHu7bnJanuary 18, 2022
Finally: the worst day ever. Of course, this is NFT/cryptocurrency.
Activision Blizzard is on sale today for $70b and the community will see $0 from this Play-to-earn.January 18, 2022