Microsoft’s remarkable 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: What was once a subsidiary arm of Microsoft now feels like one of its core strengths. Xbox is currently enjoying huge momentum, thanks mainly to Game Pass and a steady stream of acquisitions large and small that, once the Activision Blizzard takeover is complete, will leave Microsoft as the third-largest gaming company in the world (behind Tencent and Sony).
The news was kept quiet until its announcement, and games industry figures have been reacting. While it’s a little odd to start with the ultimate insider reaction, Microsoft CEO Satya Nadella’s statements have been notable for their emphasis on workplace culture, showing just how aware Microsoft is of the potential pitfalls here. The ongoing lawsuits Activision Blizzard is facing must have been an element in these conversations and, if I were a betting man, I’d put my house on Kotick trying to settle them before the takeover is complete.
Together with @ATVI_AB, we will usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive, and accessible to all. https://t.co/fF2Ig3gSfxJanuary 18, 2022
Sticking with Microsoft for just a moment, GM of Xbox Aaron Greenberg claims he’s hearing nothing but positivity from Activision Blizzard teams—of course, he would say that.
Love this focus from Satya and Phil, proud of the team and culture we have here at Xbox/Microsoft. It’s encouraging to get so many positive messages from folks working inside the Activision Blizzard teams who are so happy about what this means for their future. ? https://t.co/MtrxZZh019January 18, 2022
The other perspective comes from the Activision-Blizzard-King Workers’ Alliance, which says it it remains “committed to fighting for workplace improvements and the rights of our employees regardless of who is financially in control of the company.”
Whatever the leadership structure of the company, we will continue our push to #EndAbuseInGaming, and appreciate the outpouring of support we’ve experienced in the last year. (6/6)January 18, 2022
A big focus of the reactions has been Bobby Kotick and, generally, the Activision Blizzard executives who are in for a huge payday in the context of an ongoing series of harassment and workplace lawsuits.
Indie developer Rami Ismail is among those who think that Kotick has been too tainted by the recent scandals to stay in charge. Ismail’s suggestion that Kotick be fired seems extraordinarily unlikely, but it’s probably that after a transition period the longtime Activision CEO will step aside.
What I do think is that unless Kotick leaves before the acquisition completes or he’s fired day 1, that will be an actual disgrace for Microsoft. Buying a corporation like this in circumstances like this and not changing anything when you take control is a statement too.January 18, 2022
The press release does hint that this may be the plan: “Bobby Kotick will continue to serve as CEO of Activision Blizzard […] Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.” In addition to which, the Wall Street Journal reports that its sources have said Kotick will step aside once the deal is completed.
The wider picture around the acquisition is Game Pass and Microsoft’s goal to reach players across all devices. As industry analyst Daniel Zhuge points out, this has been the goal Microsoft is pushing towards for years.
A reminder of the approach that Microsoft is taking towards gaming, which is informing its M&A strategyAs the value of IP, content and talent grows, the Xbox business is placing its bets on ensuring it can increase the value of game pass and reach all players across all devices pic.twitter.com/pDrWKysgzZJanuary 18, 2022
Perhaps the most eye-catching aspect of the acquisition is the amount of money involved: It’s hard to even begin wrapping your head around $68.7 billion. Bloomberg’s Jon Erlichman put this in context of Microsoft’s other acquisitions and it is the biggest by a huge distance.
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
An obvious thought with this acquisition is: Wow, Sony is in trouble! Obviously PlayStation isn’t going anywhere anytime soon, but Microsoft’s momentum is undeniable and one element of this deal is that it’s incidentally acquiring some IP that is very linked to PlayStation’s history.
Microsoft now owns some of the most iconic characters of PlayStation and that is wild to me pic.twitter.com/0QqDg4Ak6pJanuary 18, 2022
id co-founder John Carmack weighed-in, and revealed that id was very nearly acquired by Activision before eventually ending up with Zenimax—which Microsoft bought last year.
Id Software very nearly got acquired by Activision, before winding up with Zenimax. Interesting that both roads would have led to Microsoft in the end. @BobbyKotick was always supportive, and it is quite an achievement to lead a company through that much growth over that long. https://t.co/Yov7kI2eO4January 18, 2022
Former Microsoft employee and co-creator of Xbox, Seamus Blackley, pointed out that the ‘metaverse’ aspect of this deal is being wildly over-emphasised by some outlets.
Hilarious that the stories look at this as being about the Metaverse and not the actual, profitable business of videogames. It’s the usual. Games are for kids. Metaverse now, that’s the real win. Someday it may even have revenue. https://t.co/kCtWxPY9C8January 18, 2022
Blackley went on to add that “I strongly believe in [Phil Spencer] as a leader and an executive. I think this is a very insightful move and could represent a huge win for Xbox. There are daunting challenges in all large acquisitions I just see the issues of developer culture as being paramount here, before all else.”
There’s also the various dormant IPs that Microsoft has acquired: Some high hopes here, though I wouldn’t get too excited about a Pitfall remake.
Hey, you know what cool thing happened with this acquisition? Hexen and Heretic now belong to Microsoft, who has the power to give them back to Raven.January 18, 2022
Indie dev Crows Crows Crows, meanwhile, got optimistic about their own prospects.
microsoft just bought us too btw pic.twitter.com/8SIWewT1RlJanuary 18, 2022
And a Hearthstone designer wonders about the crossover potential.
And there are some other good jokes too. Clippy in Overwatch!
Overwatch after Microsoft acquries Activision Blizzard pic.twitter.com/SodkEHu7bnJanuary 18, 2022
And finally: The worst of the day. It is, of course, the NFT/crypto take.
Activision Blizzard sold for $70b today and the community is going to see $0 from thisPlay-to-earn couldn’t come sooner.January 18, 2022