In a move that has sent shockwaves across the gaming world, Microsoft bought Activision for nearly $70 billion dollars. This acquisition marks the largest purchase that Microsoft has ever undertaken, cementing their position as a dominant force in the video game industry.
What does this deal bring?
Activision-Blizzard is the producer behind massive titles like Call of Duty, World of Warcraft, Overwatch, Hearthstone and Candy Crush. These games are huge cash cows. In most recent quarterly reports, Candy Crush generated over $303 million, Activision made $244 million, and Blizzard brought in $188 million.
Last year, Microsoft also acquired publisher Bethesda for $7.5 Billion, bringing huge franchises like Elder Scrolls, Fallout and Starfield under their domain.
With the acquisition of Activision, the studio will control some of the most iconic and well-recognized series in gaming. For years, Halo and Call of Duty were fierce competitors, but now they join forces underneath Microsoft’s banner.
Microsoft’s Risk with Activision
Significant allegations of sexual misconduct and harassment against Activision executives have led to an exodus of key staff. Likewise, many developers and team leads have left the company in protest. Blizzard has seen numerous walk-outs and strikes, with workers calling for the resignation of CEO, Bobby Kotick.
The impacts from these allegations resulted in significant delays for major upcoming titles like Overwatch 2 and Diablo 4. Meanwhile, games such as Call of Duty: Vanguard have been heavily criticized by fans and reviewers alike.
A press release confirms that, “Bobby Kotick will continue to serve as CEO of Activision Blizzard.”
Whether or not his tenure will continue after this series of deals is currently unknown.
Since the company was sued by the state of California, Activision stock price dropped 27% over the last year. But with the recent announcement from Microsoft, the share price has rebounded nearly 40%. Microsoft’s shares, on the other hand, dropped 1% following the announcement.
Scrutiny from the Court
Recently, House lawmakers in the United States have pushed forward antitrust legislation that could see big tech companies like Google, Facebook and Apple radically changing how they conduct business.
One of the main goals of this legislation would be to “require dominant platforms to divest lines of business where the platform’s gatekeeper power allows it to favor its own services or disadvantage rivals.”
So, in practice, a search engine like Google wouldn’t be able to default searches to a website that they own like Youtube.
Microsoft has been able to avoid the spotlight in these conversations so far. But with the purchase of Activision alongside Bethesda, the company may certainly face more scrutiny soon. However, if a media company like Disney isn’t considered a monopoly, these newly proposed laws may not apply to Microsoft.
Can Microsoft Help Activision Bounce Back?
With Microsoft coming in to take over, there’s certainly a cause to be hopeful for the Blizzard franchises that have fallen out of grace.
Microsoft’s flagship title, Halo, released with great fanfare and reception this year. It currently has a thriving e-sports scene and plenty of concurrent players to keep the game alive.
Activision-Blizzard, on the other hand, has been taking some serious losses. Flops like Call of Duty: Vanguard are experiencing extremely negative reception from it’s community. Likewise, the game’s impact on the free-to-play title Warzone has caused longtime fans to move to other titles. The delayment of Overwatch 2 has also caused considerable setbacks, not just for the game’s community but for the Overwatch League as a whole.
With Microsoft’s leadership, it’s very possible that these unreleased games may realize their potential. If anything, the Xbox game pass just became much more lucrative.