Microsoft to buy Activision Blizzard – Sony responds, Overwatch producer speaks out
Call of Duty, Overwatch, and more will soon belong to Xbox
Publisher Activision Blizzard is currently embroiled in ongoing litigation in regards to claims reporting a workplace culture that allegedly enabled acts of sexual harassment, abuse and discrimination. Read our Activision Blizzard lawsuit timeline of events for ongoing coverage.
Microsoft's surprise acquisition of Activision Blizzard for a fee of $68.7 billion (opens in new tab) was announced on January 18, and days later, there was still plenty to dissect from the landmark deal.
Sony has spoken about what the deal means for PlayStation players after its share price dropped by 13%. Meanwhile, Overwatch 2 producer has refuted claims from Activision Blizzard CEO Bobby Kotick that the fall in the company's share price was due to the game's delay.
While Microsoft's acquisition isn't done and dusted by any means, Microsoft seems confident that it will go through.
In a blog post (opens in new tab) on Xbox Wire, CEO of Microsoft Gaming Phil Spencer made the seismic announcement that the creator of Call of Duty, Overwatch, Diablo, Warcraft, Candy Crush, and more will become a part of Team Xbox in the near future.
"As a team, we are on a mission to extend the joy and community of gaming to everyone on the planet," Spencer wrote. "We all know that gaming is the most vibrant and dynamic form of entertainment worldwide and we've experienced the power of social connection and friendship that gaming makes possible.
"As we pursue that mission, it is incredibly exciting to announce that Microsoft has agreed to acquire Activision Blizzard."
We're rounding up all the talking points and news below, as we continue to document one of the most historic moments in the video games industry.
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
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 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."
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
Bobby Kotick statement
Activision Blizzard CEO Bobby Kotick has shared the following email with employees:
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.
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.
Microsoft's Gaming Leadership Team
Microsoft has posted to its newswire (opens in new tab), 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 appears to be no role for the beleaguered CEO, who many in the gaming community believe should step down from his role.
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 (opens in new tab), 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
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 have to face the scrutiny 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.
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 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.
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
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 the $7.5 billion deal seemed a real fortune (opens in new tab). But it's 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 at a much slower cadence than the popular annualized franchises, mobile titles, and esports potential that the Activision Blizzard deal could offer.
And remember that little company called Nintendo? You may have heard of it – it's got that Mario guy and the green fairy dude. As our own Daryl Baxter points out, its valuation is looking like an absolute bargain in comparison to the Activision Blizzard deal:
Food for thought - Nintendo is valued around $61 billion currently, roughly $8 billion less than this deal.Makes you wonder.January 18, 2022
Xbox could end up with 32 first-party studios
The lineup of first-party studios that would fall under Microsoft's banner now is gigantic:
pic.twitter.com/zldVsmhJ5MJanuary 18, 2022
If Microsoft’s acquisition of Activision Blizzard is successful, the likes of Blizzard Entertainment, Infinity Ward, Treyarch, Sledgehammer Games, Toys for Bob and King will all be classed as Xbox first-party studios, meaning Microsoft will have 32 studios creating games in total.
Microsoft's mobile gaming division blooms
Lots of attention here will naturally go on Microsoft's acquisition of big, AAA franchise titles like World of Warcraft, Overwatch, Call of Duty and the like. But there's another side to this story too – Activision Blizzard is also the home of mobile game developers King, the team behind Candy Crush.
You may think of Candy Crush as a quaint tile-matching time killer, but it alone has a playerbase of 250 million per month (as recorded in November 2021, at least). With 2,000 employees at King, Activision Blizzard itself spent $5.9 billion on the company back in 2015, as our mobile editor James Peckham points out (opens in new tab):
With Microsoft buying Activision Blizzard, it will make itself a much bigger player in the world of smartphone gamingKing, the makers of Candy Crush, was worth $5.9 billion in 2015 when it was bought by Activison BlizzardJanuary 18, 2022
Add to that Call of Duty Mobile, the upcoming Diablo Immortal, Hearthstone and other smaller titles included in the mobile side of the deal, and Microsoft will see its mobile gaming division balloon with the acquisition, too.
Team TRG weighs in on a 'cultural monopoly'
The news has sparked some fascinating discussions among our newly-minted TechRdar Gaming (TRG) team, too. Here are their quick-fire thought on the deal.
Callum Bains, News Writer:
"Microsoft’s potential acquisition of Activision Blizzard is huge, but big doesn’t necessarily mean better. According to Microsoft, Bobby Kotick - who’s faced scathing allegations over the past year, and calls to resign for his part in presiding over sexual misconduct and cultural problems at Activision - will remain in place, answering to Xbox boss Phil Spencer. Alongside such persistent problems, the acquisition also represents the further monopolization of the gaming industry. With some of the world’s biggest games studios now held under one roof, answering to the same commercial interests, players, as much as developers, should be worried about what this deal means for the creative direction of the industry. Games aren’t just entertainment, they’re a business. And now a single business has control of a startling proportion of the industry’s output."
Patrick Dane, Guides Editor:
"This feels like the biggest paradigm shift potentially ever in the medium. It's hard to overstate how enormous this is, and will likely shape the entire industry for years, probably decades. In the more immediate future though, questions about the culture at Activision Blizzard and Kotick's involvement with the company are important to answer. The identity of Activision Blizzard will need to change following recent horrific allegations about the workplace culture at the company. At the same time, it's harder to think of a move that could achieve something so overarching as a takeover like this.
"There will also likely be sobering conversations to be had about the power Microsoft has just gained over the entire medium, and the potential for an enormous cultural monopoly."
Adam Vjestica, Senior Gaming Writer:
"This is extremely exciting news for Xbox gamers everywhere, especially those who subscribe to Xbox Game Pass. I expect Microsoft will employ the same strategy that we’ve seen after it acquired Bethesda and Mojang Studios and keep the status quo in the short term, with an eye on more exclusivity in the years to come.
“Any existing contracts that Activision Blizzard may have with PlayStation will be honored, as we saw with Deathloop from Bethesda, and games that make sense as a multiplatform release – like Call of Duty – will continue to be available on other platforms.
“However, the exciting part for Xbox fans is that one day Microsoft could release the likes of Call of Duty straight into Xbox Game Pass, which would be a huge incentive for millions of people to subscribe and continue paying for the service every year. Throw in the likes of Overwatch 2, a new Crash Bandicoot title, and Diablo 4, and it's clear that Microsoft’s massive investment is one that it believes will convert more people to enter the Xbox ecosystem and subscribe to Xbox Game Pass.”
It's also worth noting that Activision Blizzard's cultural woes and malpractice complaints are not just historical, nor confined to the real of the litigious – there is an active strike happening among the company's workforce as this latest acquistion news is breaking:
Activision Blizzard workers are entering their seventh week of striking. Many are Raven quality assurance testers working on Call of Duty: Warzone, which players complain is full of game-breaking bugs, invisible skins and more. My latest: https://t.co/vYV24WCIO2January 17, 2022
Phil Spencer statement
Microsoft Gaming CEO Phil Spencer shared the following email with employees (thanks, The Verge (opens in new tab)), outlining his new role and praising the company's gaming efforts.
Welcome back from the holidays. To start, I’d like to thank everyone for all of the hard work and dedication that have built this business and this community. Obviously, today’s agreement to acquire Activision Blizzard is incredibly exciting. In fact it’s a milestone for our company, our business and our industry. I and the entire Gaming Leadership Team are deeply enthusiastic about this opportunity. We also announced this morning that we have surpassed 25 million Game Pass subscribers across console, cloud and PC, a great achievement for all of Team Xbox.
As players and partners, we all know how talented and dedicated the teams and studios are across Activision Blizzard. The legendary games and franchises across that company have delighted millions of people for decades. Coming together, we can accelerate our mission to extend the joy and community of gaming to everyone. We have the capability and opportunity to build simply the best, most engaging, most fun entertainment ecosystem anywhere.
Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players. We deeply value individual studio cultures. We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect. We hold all teams, and all leaders, to this commitment. We’re looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard.
We expect this acquisition to close in FY23, pending regulatory approvals. Once the acquisition is completed, the Activision Blizzard business will report to me. In the meantime, we know you will have a lot of questions. The Gaming Leadership Team and I look forward to answering as many as we can at our next Monthly Gaming Update on Jan. 26. You can submit your questions now anonymously, or post them on our Team Xbox Yammer. Please also refresh on our corporate social media guidelines.
As Satya mentioned, I am now CEO, Microsoft Gaming. This change is a reflection of the incredible work each of you are doing to create the best entertainment ecosystem anywhere. As a leadership team, we know how much exciting but difficult work we have ahead of us, so it’s crucial that we operate as a single, unified team. To that end, I’m excited to announce effective today that Jerret West, CMO of Gaming, and his marketing team will move from Chris Capossela’s organization to report directly to me. Jerret will continue to be a member of Chris’ leadership team and leverage critical parts of Microsoft’s marketing muscle including Communications, Media, and Consumer Sales.
We will have a webcast for investors and media at 6 a.m. PT to discuss the Activision Blizzard transaction and our plans as Microsoft Gaming. Please join if you can.
Activision Blizzard buyout would be Microsoft's biggest yet
If you were wondering how Microsoft's pending acquisition of Activision Blizzard stacks up compared to the other companies it's purchased over the years, the short answer is that it dwarfs them all. And by some margin.
Microsoft’s biggest acquisitions:Activision Blizzard: $68.7 billionLinkedin: $26.2 billionNuance: $19.7 billionSkype: $8.5 billionZeniMax: $7.5 billionGitHub: $7.5 bilionNokia phone unit: $7.2 billionaQuantive: $6.3 billionMojang (Minecraft): $2.5 billionJanuary 18, 2022
Will Bobby Kotick remain at Activision Blizzard if the takeover goes through?
Activision's CEO Bobby Kotick has declined to say whether he will remain as CEO of Activision Blizzard if Microsoft's acquisition goes through. Instead, Kotick said he will be available "as needed" according to NY Times' Karen Weise (opens in new tab).
In Microsoft's official announcement, Spencer writes: "Once the deal is complete, the Activision Blizzard business will report to me as CEO, Microsoft Gaming", which could imply that Kotick's role will change if he does stay on.
The future of Xbox Game Pass is now
The thought of seeing Call of Duty hit Xbox Game Pass in the future is certainly exciting, but that doesn't mean Microsoft's subscription service isn't already stocked full of awesome games to play.
The next wave of Xbox Game Pass titles includes Rainbow Six Extraction, Death's Door, Hitman Trilogy, Danganronpa: Trigger Happy Havoc Anniversary Edition, Windjammers 2, and more - all hitting the service this month.
Now, imagine a month where loads of Activision Blizzard games drop onto Xbox Game Pass? As of today, that's no longer just a figment of your imagination as it could happen in the near future.
Are these franchises going to be Xbox exclusive?
So what franchises does Microsoft gain in the Activision Blizzard takeover? Our own Patrick Dane tackled that question in a post today, and says that we can expect Call of Duty, Candy Crush, Warcraft, Overwatch, Hearthstone, Diablo, Guitar Hero, StarCraft, Tony Hawk's Pro Skater, Crash Bandicoot, Spyro the Dragon, and Skylanders to all fall under Microsoft's possession should the deal be approved.
More news coming later this week?
Is more big-time gaming news heading our way later this week? Gary Whitta, writer of Rogue One: A Star Wars Story and the upcoming Forspoken game on PS5, says that there's some even bigger news in a cryptic tweet this afternoon.
If you thought Xbox/Activision was the biggest gaming news story of the day/week just you wait.January 18, 2022
It's hard to say what could be bigger than Microsoft acquiring one of the largest third-party publishers on the planet - but if anyone would know something, Whitta would.
The calm before the storm
After today's electrifying news of Microsoft's potential acquisition and its repercussions for both companies and the video game industry at large, the news has started to slow down for the evening.
Of course, it's worth noting that this deal could face severe scrutiny here in the United States as TechRadar's US Editor-in-Chief Lance Ulanoff points out.
"Since Microsoft is both a gaming studio owner and console manufacturer, the acquisition of Blizzard could be considered both horizontal and vertical ... They'll be looking at the definition of market concentration as a measure of competitive effects. Are they overweighting the existence of direct competition (think Microsoft vs. Sony) when considering the direct impact of, say, a $67.8 billion market consolidating deal?"
The TL;DR is that this deal, while potentially great on paper for some gamers, might violate some anti-monopoly laws. However, we'll be waiting a while for the results of that investigation to come out.
When will Microsoft's takeover happen?
Activision will continue to operate independently until Microsoft's acquisition is complete, but when can we expect the deal to close? According to the takeover terms, Microsoft hopes to wrap things up in the fiscal year 2023, which falls between July 2022 and June 2023.
Once that happens, Activision Blizzard will officially become part of the Xbox team, and this could be when we start seeing its catalog of titles come to Xbox Game Pass.
Microsoft says the Activision Blizzard deal is expected to close in FY2023. This is the period between July 2022 and June 2023. Until then, Activision Blizzard will continue to operate as it currently is, and then report to Phil Spencer after close. pic.twitter.com/3xa0MitOtQJanuary 18, 2022
Will Call of Duty become an Xbox exclusive?
There's no doubt we'll hear this question asked more than a few times now that Microsoft has agreed to buy Activision Blizzard, but the reality is that any exclusivity deals, particularly on something like Call of Duty, won't transpire soon.
Speaking to Bloomberg, Xbox Gaming CEO Phil Spencer said: “I’ll just say to players out there who are playing Activision Blizzard games on Sony’s platform: It’s not our intent to pull communities away from that platform and we remained committed to that.”
Spencer’s comment mirrors a previous statement he made in a press release (opens in new tab) announcing the acquisition. There, he said: "Activision Blizzard games are enjoyed on a variety of platforms and we plan to continue to support those communities moving forward."
Microsoft’s acquisition of Bethesda in 2020 provides a touchstone by which to assess the potential exclusivity of its newly-acquired titles. Although it had initially shied away from announcing upcoming games would not find their way to PlayStation, it’s since confirmed that some future releases would be exclusive to Xbox and PC. The much-anticipated Starfield, The Elder Scrolls 6, and Redfall are among them.
Why did Activision Blizzard agree to do a deal with Microsoft?
As the biggest third-party publisher in the world, why exactly did Activision Blizzard agree to sell? To fend off increased competition, apparently.
Speaking to GamesBeat (opens in new tab), Activision Blizzard CEO Bobby Kotick said: "As you look at the increased competition between Tencent, and NetEase, and Sony, and now you have Google and Amazon, and Apple, and Facebook, and Microsoft and Netflix. We were looking at it over the course of the next couple of years, and starting to realize that we need thousands of people to be able to execute against our production plans.
"We need them in disciplines like AI and machine learning, or in data analytics, or in purpose-built cloud and cybersecurity — and that we just don’t have. And that competition for that talent is expensive, and really hard to come by."
Surprisingly, Kotick blamed the company's recent fall in share prices due to the delays of Overwatch 2 and Diablo 4, along with Call of Duty underperforming, rather than the ongoing sexual harassment investigation Activision Blizzard is facing.
"I think what affected the stock price more than that is pushing out Overwatch and Diablo. And then I think people started to see that this year’s Call of Duty wasn’t performing as well," Kotick tells GamesBeat.
"So I think certainly the [California Department of Fair Employment and Housing] filing and the Wall Street Journal article contributed to that, but stocks go up and down for a variety of reasons. I think our view was that at $95 a share with all cash, that’s a really great deal for our shareholders. And so that was an easy and independent judgment. It’s a great deal."
Sony's stock plummets following news of Microsoft's buyout
Sony's shares have dropped by 13% following the news of Microsoft's acquisition of Activision Blizzard. The last time Sony's stock dropped this dramatically was in October 2008, when it had to recall 100,000 faulty laptop batteries.
It means that the sudden stock plunge has knocked $20bn off Sony's market value, according to The Financial Times (opens in new tab). Conversely, the shares of other Japanese publishers including Square Enix, Konami, and Capcom all saw their share prices rise.
Stocks rise and fall for a variety of reasons, but it's clear that investors have taken notice of Microsoft's buyout, and the potential impact it could have Sony's future business.
Who could Microsoft buy next?
Microsoft's spending spree has likely come to an end now that it has agreed to acquire Activision Blizzard for such an astronomical sum. Microsoft has also been splashing the cash in recent years to expand its lineup of studios significantly and has bought Mojang, Ninja Theory, Obsidian, InXile, Double Fine, Compulsion Games, and Bethesda Softworks to name but a few.
But let's play devil's advocate, shall we? What if the Redmond-based company went after Nintendo? Well, the Japanese company's net worth as of January 14, 2022, is $59.39 billion, though Microsoft would arguably end up paying a lot more than that.
Buying Nintendo might seem ridiculous (as did Microsoft acquiring Activision Blizzard until literally yesterday) but it actually nearly happened 20 years ago. Sort of.
Kevin Bachus, former director of third-party relations at Microsoft, told Bloomberg (opens in new tab): "Steve [Ballmer, ex-Microsoft CEO] made us go meet with Nintendo to see if they would consider being acquired. They just laughed their asses off. Like, imagine an hour of somebody just laughing at you. That was kind of how that meeting went."
We presume that's probably how the conversation would go today...
Building a better culture at Activision Blizzard will require "significant work"
Microsoft CEO Satya Nadella has said that it will take significant work to address the cultural issues at Activision Blizzard.
In a conference call about Microsoft's acquisition of the gaming company, Nadella said: "As CEO of Microsoft, the culture of our organization is my number one priority. This means we must continuously improve the lived experience of our employees and create an environment that allows us to constantly drive every day improvement in our culture.
"This is hard work. It requires consistency, commitment and leadership that not only talks the talk, but walks the walk. That's why we believe it's critical for Activision Blizzard to drive forward on its renewed cultural commitments.
"We are supportive of the goals and the work Activision Blizzard is doing, and we also recognize that after close, we will have significant work to do in order to continue to build a culture where everyone can do their best work."
Activision Blizzard is being sued by The California Department of Fair Employment and Housing following a two-year investigation into the company's alleged discrimination against female employees.
Is Sony's Xbox Game Pass rival in trouble?
We've heard that Sony is working on its own answer to Xbox Game Pass, codenamed Spartacus, but will Microsoft's impending buyout of Activision Blizzard affect Sony's plans? Perhaps.
TRG's Senior Gaming Writer Adam Vjestica believes that Sony's subscription service will now have to offer access to PS5 first-party titles if it's to compete with Xbox Game Pass. Rumors have previously suggested that Spartacus won't include PS5 exclusives from Sony's studios.
The AB acquisition could definitely scupper Sony's long-rumored Xbox Game Pass rival. It's hard to see it succeeding now unless Sony puts its first-party games on the service day one, which I'm sure it will be reluctant to doJanuary 18, 2022
If Microsoft's service is set to include games from Xbox Game Studios, Bethesda, and Activision Blizzard in the future, Sony might have no choice but to put its $70 / £70 exclusives on its own service to attract new subscribers.
The big just keep getting bigger
Just how big will the combined Microsoft and Activision Blizzard game business be? Daniel Ahmed, who tweets about games under the handle ZhugeEX, did some back-of-the-napkin math with 2020 earnings and found that the combined gaming revenue of the two companies could be $21.9B.
Sony's game revenues sit between $20B and $24B. In other words, Sony might still be the bigger gaming company. What's more interesting is how the deal, assuming it goes through next year, catapults Microsoft to the top three in overall gaming revenue (above giant Nintendo).
It's a lot of guesswork and past performance is not necessarily an indicator of future earnings. Sony could, with its big PSVR2 lineup, make a big splash this year. However, we're betting that Microsoft will experience a sea-change in its gaming financials outlook if this acquisition goes through.
To put the MS / ATVI deal into context, and i'm conscious the numbers below are from 2020, the combined revenue of Xbox and Activision Blizzard would put them at ~$21.9 billion in that year. In other words, #3 when looking at video game revenue. https://t.co/IsfUhq2xcdJanuary 18, 2022
Activision games will stay on PlayStation for now
After its share prices dropped 13%, Sony has finally responded to Microsoft's agreed acquisition of Activision Blizzard and said that it expects contractual agreements over multiplatform games will continue.
Speaking to the Wall Street Journal, a spokesperson for Sony said: “We expect that Microsoft will abide by contractual agreements and continue to ensure Activision games are multiplatform.”
Activision Blizzard also echoed Sony's statement, but the phrase 'existing commitments' should be noted.
“We will honor all existing commitments post close,” it said. “As with Microsoft’s acquisition of Minecraft, we have no intent to remove any content from platforms where it exists today.”
Microsoft has also vowed to keep Activision Blizzard games on PlayStation, at least for now.
Xbox Gaming CEO Phil Spencer said: “I’ll just say to players out there who are playing Activision Blizzard games on Sony’s platform: It’s not our intent to pull communities away from that platform and we remained committed to that.”
However, much like Microsoft's deal with Bethesda, we expect that once Activision Blizzard's existing contracts end, more of its games will become exclusive to Xbox.
Microsoft avoided making any direct commitments to future exclusivity arrangements when it purchased Bethesda, only to later announce that several upcoming Bethesda games will only be coming to Xbox and PC. Among them are the much-anticipated Starfield, The Elder Scrolls 6, and Arkane’s open-world, co-op shooter Redfall.
Overwatch 2 producer blames Activision Blizzard CEO for delays
Overwatch producer Tracy Kennedy (opens in new tab) has blamed Activision Blizzard CEO Bobby Kotick for the problems that have plagued the game and development on its sequel.
Kennedy said that Kotick would shove random projects onto the Overwatch team, prompting them to work overtime, only to cancel those projects.
Bobby, tell everyone about the random projects for OW1 you all would shove on us, the team would do OT for only them to get cancelled and for months of OW2 dev to have been lost. Or how almost entire teams are turning over and citing you as the reason. Don't be shy. https://t.co/3ksVMMaCwfJanuary 19, 2022
Kotick recently blamed the delays of games like Overwatch 2 and Diablo 4 as the reason why Activision Blizzard's share prices dropped in recent months, and not because The California Department of Fair Employment and Housing is suing Activision Blizzard following a two-year investigation into the company’s alleged discrimination against female employees.
Microsoft might struggle to make Call of Duty exclusive
Speaking with GamesIndustry.biz (opens in new tab), DFC Intelligence owner David Cole said that he doesn't believe Microsoft will be able to make Call of Duty exclusive to the Xbox platform, saying: "Right now, I don't think [it will]. For one thing, it would be hard to get it past regulators if they want to lock the competition out."
That won't stop Microsoft from trying, of course, particularly as Call of Duty is the most played video game on consoles, including PlayStation 4 and PlayStation 5. Microsoft will also be able to offer the game on Xbox, PC, and mobile if it brings it to Xbox Cloud Gaming, which might appease regulators more than if the game was only available on a console.
It's also hard to believe that Microsoft would be willing to spend $68.7 billion if it didn't have plans to make Call of Duty an exclusive at some point in the future, though any existing contracts Activision Blizzard has with Sony will need to be honored first.
Activision Blizzard could have been bought by EA
According to Activision Blizzard's CEO Bobby Kotick, the company was looking to sell to other companies before Microsoft made its approach.
In an interview with GamesBeat (opens in new tab), Kotick implied that EA could have bought out Activision but it simply wasn't big enough.
"When you’re comparing us to, you know, $2 trillion companies and $3 trillion companies and trillion-dollar companies and $500 billion companies, you realize, we may have been a big company in video gaming, but now, when you look at the landscape of who the competitors are, it’s a different world today than ever before," explains Kotick.
"I think that even if we were to have consolidated within EA, that wouldn’t have given us what we’re going to need going forward. And so you needed to have a big partner in order to be able to make it work."
Microsoft's takeover criticized by World Bank chief
World Bank President David Malpass has criticized Microsoft's decision to spend $68.7 billion on acquiring Activision Blizzard and suggested it isn't the "best allocation of capital".
Speaking to Reuters (opens in new tab), Malpass said: "You have to wonder: 'Wait a minute, is this the best allocation of capital?' This goes to the bond market. You know, a huge amount of (capital) flows are going to the bond market.
"That gets you into a situation where a huge amount of the capital is being allocated to already capital-intensive parts of the world — the advanced economies — building more and more on top of already heavily built infrastructure and real estate, for example."
Microsoft's deal to buy Activision Blizzard dwarfs the amount of $23.5 billion in cash contributions by wealthier donor countries to the International Development Association, the World Bank's fund for the poorest countries, which works out at about $8 billion annually over three years.
Microsoft has not yet responded to requests regarding Malpass' comment.
Activision Blizzard CEO wants to revive Guitar Hero and Skylanders
Activision Blizzard CEO Bobby Kotick has said he would like to see Microsoft bring back some of the publishers forgotten franchises like Guitar Hero and Skylanders. Kotick explains that the company wanted to do more with both of these franchises, but didn't have the resources. Kotick also says Microsoft could do so much more with its mobile game, Candy Crush.
“[Xbox Gaming CEO] Phil [Spencer] and I started riffing on things for the future,” Kotick said to VentureBeat (opens in new tab). “I’ll give you three that are really compelling. I wanted to make a new Guitar Hero for a while, but I don’t want to add teams to do manufacturing and supply chain and QA for manufacturing. And the chip shortages are enormous.
“We didn’t really have the ability to do that. I had a really cool vision for what the next Guitar Hero would be, and realised we don’t have the resources to do that.
“And Skylanders too. One of the great disappointments of my career is that other people came in and they came out with crappy alternatives. And they dumped all of these crappy alternatives in the market, and basically destroyed the market for what was a really cool future opportunity.
“If you look at Skylanders, with its hardware and manufacturing and supply chain, there are the same kinds of things that we can’t do but Microsoft can.
“And in these conversations I was sharing my frustration about not having enough social capability in Candy Crush. I really want to be able to have a Candy Crush experience where players can play games against each other. And they can socialize. And they can have voice over IP and video over IP.
“That’s a more social game, but it’s rooted in being able to play the game against another person or other people. There is nothing but opportunity for the kinds of things that we can’t do on our own, and the resources that they have for us to just make a difference.”
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