Microsoft’s $68.7bn acquisition of Activision Blizzard announced today can offer a fresh start for the beleaguered publisher, as well as fans of its games and esports, though there is still frustration that Bobby Kotick is retaining his job and a long road ahead to regaining trust with gamers.
Esports News UK editor Dom Sacco shares his thoughts on what the deal might mean for the industry and esports in the future.
Microsoft has shocked the gaming world today by announcing it will be acquiring the troubled games publisher Activision Blizzard in a deal worth $68.7bn (or $95 per share).
When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Riot Games’ owner Tencent and PlayStation company Sony.
The planned acquisition includes franchises from the Activision, Blizzard and King studios like Warcraft, Diablo, Overwatch, Call of Duty and Candy Crush, ‘in addition to global esports activities through Major League Gaming (MLG)’, which Activision Blizzard owns and I’ll come onto later.
It’s a huge deal, and as expected, there’s been a lot of corporate waffle coming from both Microsoft and Activision Blizzard around this announcement.
Microsoft spoke about the deal ‘providing building blocks for the metaverse’, this idea of a networked 3D worlds where people can interact in different spaces via avatars, linking virtual economies, VR and more.
Phil Spencer, CEO of Microsoft Gaming, said in this blog post: “Over many decades, the studios and teams that make up Activision Blizzard have earned vast wellsprings of joy and respect from billions of people all over the world.”
Yes, there’s no doubting huge franchises like World of Warcraft and Call of Duty have been popular, but respect? And ‘vast wellsprings of joy?’ Excuse me while I throw up.
While Microsoft says Acti has earnt such joy from gamers, let’s not forget it has also earnt deserved criticism from them over the years, especially in more recent years. As per the section below.
Diversity, PR and the long road to regaining trust ahead
Acti has gone from controvery to controversy; it has seen a seemingly endless stream of PR disasters. The Hearthstone Blitzchung incident. The way it ended Heroes of the Storm esports. The Warcraft 3 Reforged disaster. The harassment scandals. The mass layoffs despite record profits. Staff that can’t afford lunch. Bobby Kotick. Its sorry treatment of the Diablo franchise (“do you guys not have phones?”). I could go on.
Activision Blizzard’s harassment scandals and generally poor treatment of staff has painted it as a greedy, unwelcome games company. Microsoft is clearly aiming to steer it in a better, fairer and more diverse direction in the future.
Phil Spencer said: “As a company, Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players. We deeply value individual studio cultures. We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect. We hold all teams, and all leaders, to this commitment. We’re looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard.”
Microsoft CEO Satya Nadella added: “We will drive forward on renewed cultural commitments. We’ll have significant work to do to build a culture where everyone can do their best work, a welcoming and safe community for all of our customers.”
Of course Microsoft will say that things like this, but I do actually believe it will do as it says. Actions speak louder than words and the proof will be in the pudding, but this could be the fresh start that Activision Blizzard and its followers and staff need.
Microsoft certainly has a more diverse gaming leadership team than Acti:
Microsoft also currently has pretty good standing with gamers. It recently launched some impressive Halo Infinite esports plans, it’s not seen as greedy like EA is despite its huge size and stature, and is generally regarded as a family-friendly brand that has done decent things with the likes of Xbox, PC gaming, Minecraft and newer IPs like Sea of Thieves.
Microsoft has been hit and miss with buyouts in the past. Skype is hugely irrelevent now, but I like what they’ve done with Minecraft, opening it up into the world of education and bringing it to more platforms and children around the world. The fact Microsoft purchased Minecraft for $2.5bn is a steal, honestly.
Microsoft is a king of PR; Activision Blizzard is a thief pretending to be a prince. They’re miles apart. Microsoft should be able to strengthen Activision Blizzard’s image and I hope internally make the right changes it needs to start the long road ahead to restoring faith and trust with its playerbase.
But Microsoft is no saint itself. This acquisition comes as Microsoft opened a review of its sexual harassment policies following reports around how founder Bill Gates treated employees and women in the past. So perhaps they are a match made in hell.
Time will tell.
Bobby Kotick retains his job – for now
One aspect of the deal some are unhappy with is the fact that Bobby Kotick will continue to serve as CEO of Activision Blizzard.
But let’s not forget – Bobby will have significantly less power in the future than he does now. He’ll eventually be reporting in to Microsoft, which will ultimately have the final say on overall business decisions.
In terms of what the deal means for the day-to-day running of Activision Blizzard and Microsoft Gaming right now, they will both continue to operate independently until the transaction closes during the fiscal year 2023.
At that point, when the deal is complete, Bobby Kotick and Activision Blizzard will report in to Phil Spencer, CEO of Microsoft Gaming. And some say Bobby could be removed then.
Bobby said: “As we thought about possible partners, all roads ultimately led to Microsoft.
“For more than 30 years our incredibly talented teams have created some of the most successful games. 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. We couldn’t be more excited for our incredible future together.
It’s fair to say Bobby is a much-disliked figure in the community, known for his shrewd business tactics and focus on money over anything else, as outlined in the section above and the fact that more than 1,300 Activision Blizzard staff and contractors recently requested Bobby Kotick’s exit.
I do believe a new leader at Acti Blizz will do the world of good, but as long as Bobby keeps on making money and keeping the share price steady, I’m not sure he will be replaced. Microsoft spoke highly of him during the media call today.
‘Hope and Halo’ – What does Microsoft’s buyout mean for esports?
I’m quietly optimistic about what this deal could mean for the future of Activision Blizzard’s esports operations.
To be honest, I’ve not been impressed by Activision’s esports strategy or treatment of the competitive gaming scene. The focus on franchising over fans, the recent criticisms of the Call of Duty League, the way it shut down Heroes of the Storm’s esports ecosystem… hell, the way Blizzard ignored the original Warcraft 3 Dota mod, allowing Valve and Riot to capitalise with Dota 2 and League of Legends, was a huge fail on their part.
There is hope. Call of Duty is a classic FPS that has a solid community and live esports atmosphere like no other game I’ve seen live, I actually don’t mind the chill snooker-esque Hearthstone broadcasts and Overwatch… has some fans, I suppose.
But Activision Blizzard seems to be just trudging along with esports. The current state of the Overwatch League, the CoD League and Hearthstone’s 2022 esports plans doesn’t exactly impress me or feel me with excitement. Let’s not even mention World of Warcraft and the race to world first that Blizzard could – and should – have properly pushed.
Microsoft, on the other hand, has had set up a decent esports ecosystem with new release Halo Infinite and I look forward to seeing what it does there. The first few tournaments have had some hype to them, we’ve seen teams form and big orgs get involved.
However, Gears of War, Forza, Quake and even Minecraft have such tiny esports scenes, I’m not filled with heaps of confidence either.
But I have a feeling Microsoft’s support of Acti Blizz’s core franchises could help give them an overall shot in the arm, which may result in better esports from them in the long-term, using Halo Infinite’s model.
Microsoft is also an entirely different beast to Acti Blizz, with almost 190,000 employees worldwide. While not all of those are in gaming, it’s clear that Microsoft is much bigger and has far greater resources than Acti. After the deal is completed, Microsoft will have 30 internal game development studios, along with “additional publishing and esports production capabilities”.
The publisher could easily grow the esports teams if it wanted to in the future. So we’ll see what happens there.
Related article: Students cleverly recreate entire Queen Mary’s College esports facility in Minecraft ahead of Minecraft Collegiate League
Is Microsoft’s acquisition of Activision Blizzard good news for gamers? It could mean more choice, possible savings and the change Warcraft desperately needs
This is an enormous deal. Let’s not forget, Activision Blizzard is not just Blizzard Entertainment, the makers of Overwatch and World of Warcraft. It also includes Beenox, Demonware, Digital Legends, High Moon Studios, Infinity Ward, King, Major League Gaming, Radical Entertainment, Raven Software, Sledgehammer Games, Toys for Bob, Treyarch and more.
That’s a ton of teams, almost 10,000 employees, and a whole different bunch of gamers affected. Those who play casual titles by King, like Candy Crush, will obviously have a very different experience to those who play Blizzard games like the World of Warcraft MMO or Infinity Ward’s CoD shooters.
For gamers, I think this deal is good news. When the transaction closes, Microsoft will offer “as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog” (Phil Spencer’s words).
Game Pass has more than 25m subscribers right now.
“With Activision Blizzard’s nearly 400m monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry,” Microsoft added.
Pricing for individual Activision/Blizzard games has always been pretty expensive (especially at launch), and Game Pass customers will now gain access to these games at a more manageable monthly price. What this means for World of Warcraft’s existing monthly subscription is unknown, but it’d be great to see this thrown into Game Pass somehow or have the pricing lowered substantially when bought in conjunction with Game Pass.
Could we even see World of Warcraft finally come to consoles, like Final Fantasy XIV already is? It’s unlikely, but could be an option for future versions of the game – who knows.
Expect more on mobile. The press release stated: “Microsoft and Activision Blizzard will empower players to enjoy the most-immersive franchises, like Halo and Warcraft, virtually anywhere they want.”
Yes, we already have Hearthstone on mobile, but I think more may be coming.
Overall, I’m personally excited about what this deal could mean for the future of Warcraft.
I see Microsoft to World of Warcraft as I see Disney to Star Wars. Yes, there are some things Disney have got wrong with Star Wars, but they’ve arguably given us more content, interesting new directions and an expanded universe more than LucasArts would’ve done by themselves. This deal could offer Warcraft fresh start that franchise so desperately needs.
Riot is working on its League of Legends MMO – if Microsoft doesn’t make some sweeping changes to Warcraft, it could be left in the dark when Riot launches its MMO.
As I’ve said, there’s still a long road ahead for Activision Blizzard to turn things around, but I feel Microsoft’s buyout is a good first step. I’m relatively optimistic for the future and look forward to seeing how this deal may lift Acti’s esports operations in the future.
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Dom is an award-winning writer who graduated from Bournemouth University with a 2:1 degree in Multi-Media Journalism in 2007.
As a long-time gamer having first picked up the NES controller in the late ’80s, he has written for a range of publications including GamesTM, Nintendo Official Magazine, industry publication MCV as well as Riot Games and others. He worked as head of content for the British Esports Association up until February 2021, when he stepped back to work full-time on Esports News UK and as an esports consultant helping brands and businesses better understand the industry.