14 DAY TRIAL // Microsoft, one of the biggest software companies in the world, is trying to buy Activision Blizzard, one of the biggest video game publishers in the world. An official announcement was made in 2022 and since then the narrative surrounding the effort has shifted in some interesting ways. The result of this process will have profound effects on the video game industry and the wider world.
It all kicked off a little over one year ago. On 18 January 2022, Microsoft surprised the world of gaming by announcing that it was seeking a deal to buy Activision Blizzard and bring them under the Xbox division for the massive sum of 68.7 billion dollars, all of it in cash.
These basic facts have not changed, even as rivals like Sony have sought to stop the deal, while regulators from across the world are moving to scrutinize it. The purchase could be closed as soon as this summer but there’s also the possibility that major changes to the terms. The entire effort could also lead to nothing if governments oppose it and negotiations do not produce results.
What should a regular gamer think about this massive potential deal? It depends on a lot of factors and on how interested one is in the products the two companies create. Anyone who likes the Activision Blizzard slate of experiences should want the company to ditch its current leadership, which is plainly morally corrupt and mostly business incompetent.
Bobby Kotick and his associates have presided over the years when the publisher’s biggest franchises were deeply affected by cost overruns, reduced sales, botched announcements and releases, loss of licenses, and severed partnerships. World of Warcraft and Hearthstone are no longer playable in China, a huge market. Call of Duty had more than one bad year and only recovered with a new Modern Warfare in 2022. Diablo IV is still not out, and these are just a few examples of the company’s business problems.
And then, there’s the moral side of things. Activision Blizzard was rocked by multiple scandals involving inappropriate behavior from executives. Yet, the most important leaders have never completely assumed responsibility and did not resign. The company has also worked hard to limit the power of its workers, including by refusing to recognize union votes.
Can Microsoft deal with all these issues and improve the state of its acquired assets, which in turn will mean better video games for the public? There’s no easy answer and there are no certainties in such a complex industry.
There are some facts that might suggest how the future of the two entities might play out. The Xbox division has made some big acquisitions before, including big companies like Bethesda. So far, it seems that they have managed to integrate them without major problems, although the real test will be the launch of the already delayed Starfield. So far, there have been no reports of problems or accusations of abuse from the executive team.
But the fact that Phil Spencer seems like a good guy and says the right things does not mean that he and his fellow executives can quickly and efficiently change how Activision operates. They might find that the negative elements of the culture have deep roots. They might discover that plenty of developers will be ready to take compensation and leave rather than continue to work there.
And there’s the problem of video game development. Microsoft has been saying that it wants to keep Call of Duty, which is the biggest asset associated with the entire acquisition, on as many platforms for as long as possible. The company seems ready to give partners and authorities legally binding assurances that it will do so.
But it will also put the next Modern Warfare or other Call of Duty title on its Games Pass service, delivering it for free to those who pay a subscription on any Xbox platform or on the PC. And it aims to do the same with all its other first-party video games.
These will inevitably include new installments for franchises like Warcraft and Diablo. Can Microsoft meet the expectations of the fan base? Or will they be affected by delays and other problems, like Halo has been recently? There’s no way of knowing. Gamers can only hope.
Microsoft’s attempt to buy Activision Blizzard is currently being scrutinized by a range of regulators from across the world. The European Union seems to be determined to lay out the case against such a move, even if it might allow it to go forward as long as the two parties make certain commitments to keep the market competitive.
The United Kingdom is also investigating the deal and the United States Federal Trade Commission has also indicated that it might block the acquisition. Governments are not offering many details about their process but it is safe to presume that furious talks are going on behind the scenes.
Presumably, a clearer picture will emerge before autumn. There’s little that gamers can do to influence the result unless they happen to have a few billion dollars that they want to use to buy shares in either of the two companies and then try to influence their strategy. But those who live in countries where the Microsoft – Activision deal will have effects can seek out their representatives and ask about their position.
Plenty of players will have no interest in what happens between the two companies. Others will cheer for a particular outcome based on the video games that they love or the creators they trust. Another group might be more interested in how the end of this saga affects workers at Activision Blizzard or the fate of Bobby Kotick.
To me, the most threatening element of the entire affair is how it would bring too many big franchises under the guidance of a company that seems limited in its ability to handle the ones it already owns. This, in turn, might lead to a more limited set of opportunities for the smaller studios inside Microsoft, which will be assigned to work on the likes of Call of Duty or Warcraft.
The video game ecosystem thrives on innovation, variety, and weirdness. And I fear that a successful Microsoft – Activision deal will create more problems than it solves on that front.