Activision Blizzard CEO Bobby Kotick is expected to leave the company once the $68.7 billion buyout of his company has been completed. The acquisition will give the embattled CEO a convenient exit plan, as he and his leadership team deal with numerous lawsuits and investigations, a negative public image, and a stock price that plummeted around 30% through the second half of 2021.
Reporting in the wake of the buyout announcement has honed in on the troubles that Activision has faced over the past six months and how they opened the door for Microsoft to buy the company and for Kotick to leave on his own terms.
Bloomberg’s (paywalled) behind-the-scenes reporting has Kotick asserting that the acquisition had nothing to do with last year’s controversies or the calls for him to steep down. However, “A person familiar with the discussions, who was not authorized to speak publicly, said Microsoft looked at Activision’s situation, given all the negative attention and pressure on Kotick, and wondered if the beleaguered CEO would be willing to do a deal.
“Kotick initially didn’t want to sell, according to another person familiar with the talks, and also put the word out to see if any other company would outbid Microsoft. But at that point, Kotick had little leverage with his board amid the ongoing public scrutiny at his company.”
Per the Wall Street Journal, “Mr. Kotick has been eager to change the public narrative about the company, and in recent weeks has suggested Activision Blizzard make some kind of acquisition, including of gaming-trade publications like Kotaku and PC Gamer, according to people familiar with him. The Activision spokeswoman, Ms. Klasky, disputed that Mr. Kotick wanted to make the acquisitions. A spokesman for G/O Media, the parent company of Kotaku, declined to comment. PC Gamer didn’t respond to a request for comment.”
Further Reading: What does Microsoft buying Activision Blizzard mean for gamers?
The simple fact is that the narrative surrounding Activision Blizzard has not significantly changed over the past six months. If anything, it’s narrowed in and focussed on Kotick and his personal leadership of the company. The widespread allegations and DFEH lawsuit that emerged last summer were initially met with a dismissive attitude by executives which eventually resolved itself into announcing a new zero tolerance policy with the board of directors publicly backing Kotick.
However, it was then reported in November that Kotick knew of the allegations and turned a blind eye. This made a bad situation worse at the company, especially as Blizzard games Overwatch 2 and Diablo 4 were delayed, Call of Duty: Vanguard made for a relatively down year for the franchise, and workers strike and seek to unionise. The company is still very profitable, but the market cap took a major hit, giving Microsoft the chance to offer Kotick a way out that he is seemingly now willing to take.
Again, as reported by the WSJ, “Some of Activision’s directors who had stood by Mr. Kotick during the crisis were individually beginning to get anxious, according to people familiar with the board. Some directors didn’t believe shareholders and employees would be comfortable without a major change but weren’t willing to try to oust Mr. Kotick. He is expected to depart the company after the deal closes, the people said.”
Kotick personally holds a stake in Activision that will be worth $390 million.