Microsoft just announced that it plans to acquire Activision Blizzard for $68.7 billion.
It is yet another sign of increasing consolidation in the big budget video game business, and just the latest acquisition for Microsoft, which has been on a bit of a spree to bolster its library of games, most recently with its acquisition of Skyrim and Doom publisher Bethesda.
Acquiring Activision Blizzard, one of the largest video game publishers in the industry with games like Call of Duty and World of Warcraft, is its biggest move yet. It almost certainly will help Microsoft’s game subscription business, Game Pass, which gives users access to a library of games for a monthly fee.
It’s not necessarily good for customers, but it makes sense for Microsoft, or any game company for that matter, to simply buy out the competition and become one of the only game companies, or cheapest ways to access many of the most popular games in the world. But Microsoft is buying Activision Blizzard at the precise moment where its customers and employees are demanding it be held accountable for severe workplace issues. Microsoft is buying the games, but it also means that it now has to actively address some of the worst abuses we’ve seen in the video games industry as opposed to sitting on the sidelines and wagging its finger at the competition.
Last summer, California sued Activision Blizzard for being a “breeding ground for harassment,” where women were subject to so-called "cube crawls" during which men at the company got drunk and "crawl[ed]" through office cubicles and harassed women. As Motherboard reported, Blizzard managers joked about sleeping with their assistants during meetings and recruiters asked a woman if she "liked being penetrated" at conferences. Some shareholders have called for Activision Blizzard’s CEO Bobby Kotick to resign.
Activision Blizzard’s trouble doesn’t stop there. On the Call of Duty side of the company, employees at Raven, the developer in charge of the hugely popular battle royale mode Warzone, have walked off the job and are currently still on strike to protest the mistreatment of quality assurance workers.
Faced with these issues, Activision Blizzard employees have done what any reasonable and motivated workers would do: They started to organize and are in the early stages of a unionization effort.
Activision Blizzard on the other hand, has responded by downplaying reports of abuse, union busting, and intimidation.
As more news of Activision Blizzard’s mistreatment of its employees came to light, some in the video game industry condemned its behavior, and even called for unionization. Phil Spencer, the head of Xbox at Microsoft, said that he was considering taking action against Activision Blizzard and that he was "evaluating all aspects of our relationship with Activision Blizzard and making ongoing proactive adjustments."
We don’t know what this action or adjustment was supposed to be, but Microsoft and Spencer now own Activision Blizzard and are ultimately accountable for this mess.
Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick both mentioned culture in a call announcing the acquisition this morning. “As CEO of Microsoft, the culture of our organization is my number one priority,” Nadella said. “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 the close, we will have significant work to do in order to continue to build a culture where everyone can do their best work.”
“We have fundamental values that we refuse to compromise on,” Spencer said on the call.
“When this transaction closes, Microsoft will be the number three game company in the world, in terms of revenue, behind Tencent and Sony,” Spencer said on the call.
“Thank you for welcoming us as a part of one of the world's most admired companies,” Kotick said on the call.
If Microsoft cannot execute a convincing house-cleaning at Activision, that reputation will become part of the purchase cost.