Microsoft has announced their intention to acquire Activision Blizzard King in a deal that values the monolithic publisher at $68.7 billion. This, Microsoft states, will help to ‘provide building blocks for the metaverse’, and is expected to be approved by regulators in FY23, which runs from July 2022 to end of June 2023 for Microsoft.
Activision Blizzard is the third largest video games company in how much revenue they draw in, behind only Sony and Tencent, thanks to their vastly popular and successful franchises like Call of Duty, Candy Crush and Warcraft, Diablo and Overwatch. They also have a sizeable position in esports, thanks to owning Major League Gaming, which hosts popular Call of Duty and Overwatch competitions.
This leaves massive questions over what the future of video games looks like. With Microsoft’s acquisition of Bethesda for $7.5 billion in early 2021, ones of the biggest concerns was that all of Bethesda’s future games would become Xbox exclusives, a fear that turned out to be warranted. However, nothing that Bethesda produces has the reach and pervasiveness of Call of Duty or Candy Crush – not even Skyrim.
Will Microsoft be content to keep the next Call of Duty game as a cross-platform release? Will COD Warzone remain on PlayStation while Modern Warfare 2 becomes an Xbox exclusive? We simply do not know right now, but this is a huge deal.
Activision Blizzard comes with a significant stigma right now. The company is embattled on multiple fronts with lawsuits and government investigations into the workplace culture, as well as employees who are striking while also preparing to unionise. This has drawn stern criticism from the leaders of Xbox, PlayStation and Nintendo, so with that in mind, Microsoft acquiring the company could be a huge step forward in cleansing it of its unsavoury whiff.
That certainly seems to be the implication. While the deal works its way through anti-trust regulators, Bobby Kotick will remain as CEO of Activision Blizzard. However, “Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.” This certainly implies that the man who allegedly knew of the allegations running through his company for years will be hanging around for the transition period and then sail off into the sunset.
Just last week, Spencer said that he doesn’t believe it’s his job “to punish other companies” like Activision Blizzard for such misdeeds, though now that Activision will be part of his company, he needs to ensure that they are squeaky clean.
In the here and now, Spencer said, “Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them. Together we will build a future where people can play the games they want, virtually anywhere they want.”
“For more than 30 years our incredibly talented teams have created some of the most successful games,” Kotick said. “The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”
Considering the size of this deal, you can expect that it will draw much greater scrutiny from legislative bodies over the next few months. While the Bethesda purchase was waved through, this is much more significant and will have a higher barrier for success.
Source: Microsoft
Lyts1985
This could be awful news for Sony and PlayStation fans. Really feels like MS won’t be happy until they put Sony out of business or force them into partnership somehow.
colmshan1990
It’ll end up with Microsoft buying Sony’s PlayStation division.
This is a bad time for gamers though. Gamepass gets even better, but the big tech companies have realised you don’t need to innovate… You just have to buy out your competition
MrYd
That’s been how MS operates forever. Buy the competition. Or copy it and force your version on to everyone. And then worry about how to make money later on.
MrKipling89
I’m confused, Push Square are kind of reporting that the deal is done and dusted. So not totally set in stone?
Sony should just retaliate and buy Take Two and Ubisoft.
Stefan L
The acquisition has been approved by both boards, but it has to go through regulatory bodies which could cancel it entirely or make demands on Microsoft to avoid monopoly or anti-trust implications.
gazzagb
Game Pass is going to be unstoppable soon enough! Looking forward to being able to play the COD campaigns that I’ve missed. I love them but they’re never worth the £50 price tag.
MrYd
Game Pass is going to be expensive soon, surely?
If it’s got 25 million subscribers now, and they’ve spent $75bn on Activision Blizzard and Bethesda, that’s $3000 they need to make from each subscriber. Assuming they make everything exclusive and actual sales plummet because of Game Pass.
If they’re paying $15 a month (we’ll stick to the US prices, since that’s what all these deals are in), that means 16 years and 8 months of subscriptions needed. Just to cover the cost of Activision Blizzard and Bethesda.
So will the price go up? Have MS got enough money to make everything exclusive and not put the Game Pass price up? Reports of the Activision deal being about half the cash they’d got lying around. Almost half of their yearly revenue. And worth about a quarter of their total assets. So a huge deal.
There’s always a chance it won’t be allowed to happen, I guess. It’s clearly not a good thing having MS buying up everything they can and keeping it from the competition. And won’t look great for them if they get rid of Kotick while giving him hundreds of millions of dollars to go.
colmshan1990
Activision made $8bn last year. So just 9 years until the acquisition pays for itself. Realistically, less time than that considering the huge competitive advantage this gives them over Sony
There’s no debt involved, they’re buying them out with cash on hand.
Definitely bad for gamers, but can’t see US regulators stepping in given the political landscape over there
gazzagb
Admittedly I’m just talking about Game Pass for PC, which is only £8pm – compared to my Spotify (£10) and Netflix (£13) it’s great value and I would continue to subscribe if the price was hiked.
Starman
You seem to think the only way they’ll get any revenue back from this deal is game pass? You’re forgetting about mobile games, dlc (I’m sure I saw something recently about half of activi’s revenue being from dlc now) and all the other game sales they’ll still make from other platforms and people who aren’t subbed to game pass.
pitchforkdisney
Well Activision own PDQ/Centresoft – The main distributor of PS hardware in the UK. Cats & Pigeons.
Andrewww
Very bad news overall, it’s a black day for gamers, as it’ll result in limitations and more gamers being actively kept from what they want to play, on their console of choice. And we all know by now that Spencer is a liar, he better just shut up about this rubbish of ‘people can play the games they want, virtually anywhere they want’, because it’s always only as long as they buy XBox (console or PC).
Personally, I won’t be affected directly, as I don’t like or play any Activision games, really. But I expect negative fallout from this.
Lyts1985
The irony of the man’s statement that its fantastic news for gamers and how it brings more games to “everyone on the planet” is just mind blowing.
‘We’re going to acquire all the developers and publishers you PlayStation guys love so much and force you to abandon your console of choice for the privilege of playing these games’
Great, thanks. Between Bethesda and now this, gamer choice simply won’t exist before much longer. Feels like the playstation is becoming this generations Betamax or HD-DVD. Be damned will I switch to Xbox out of principle due to their horrible business practices, I’ll just stick with good ol’ Nintendo.
Starman
Call of Duty on gamepass will be a huge attraction, I don’t think they’ll make it exclusive though, not for a few years at least. Big move by Microsoft.
Tuffcub
Call of Duty is not what it used to be, like every Activision franchise they are flogging a horse way past it’s death. It’s not selling anywhere near what it used to. Blizzard manage to make a game once every ten years. It’s not exactly a huge loss if they go exclusive.
Also it’s not like they can revive many old games, most of Actis past games have been licensed – Transformers, Turtles, etc. They shut down production of original IPs years ago. Creatively they are dead in the water.