With the recent acquisition of Activision-Blizzard by Microsoft for a record breaking $68.7 Billion dollars, industry professionals have been scrambling to forecast what this means for the future of the titan of the gaming space.
For anybody who has been keeping up with gaming industry news, they will know that Activision-Blizzard, despite healthy profits, has been on a steady decline with their brand health for almost five years now.
The most notable in this decline was the recent serious allegations of sexual harassment and misconduct that ran rampant through the company, dating back almost to its inception.
So, when we learned of the Microsoft acquisition, many believed this to be the end of Activision-Blizzard’s slow demise.
Today we’ll be exploring every facet of this acquisition, including the history behind Activision-Blizzard’s current situation, their future Metaverse goals, what Microsoft intends to do with the company, and lastly the fate of Bobby Kotick, the current CEO of Activision-Blizzard.
Activision-Blizzard’s Troubled Past & Present
In 2022, Activision-Blizzard came under fire from the Californian government, after a multi-year investigation into their company’s history of sexual abuse and harassment allegations. This investigation caused a ripple effect throughout the company, not only tanking their share price, but saw many key developers leaving the studio.
Through this time, public opinion of the company plummeted. What was once a beacon of AAA game excellence, was not seen as a stain in the gaming industry world. Protests followed, and several petitions to remove the current CEO Bobby Kotick were made.
Whilst this investigation is still ongoing, even today, the result of even the announcement of this investigation has left Activision-Blizzard licking their wounds.
Since these allegations were made public, the company has committed itself to improving its work culture. Yet, despite this, it left Activision-Blizzard in a ripe position for acquisition.
The Microsoft Acquisition – A Record Breaking All-Cash Deal
The news that Microsoft would be buying the entire Activision-Blizzard company came as a shock to everyone in the industry. Nobody, even the most attentive industry professionals, could have guessed the two companies were in talks for an acquisition.
With the purchase price set to $68.7 Billion dollars, this makes this deal the largest in gaming history, by almost four times the previous record. Microsoft is buying Activision-Blizzard’s stock at a premium, roughly around $92 per share.
This saw share prices climb by roughly 30% in a single day, as Microsoft begins the process of taking full ownership of the company.
Whilst the deal itself won’t be fully completed until the end of the 2023 financial year, the process is already underway to bring Activision-Blizzard into the Microsoft fold.
What Does This Mean for the Future of Activision-Blizzard?
This one question has been at the forefront of gamer’s minds since the news broke. With so many legendary IPs under their belt, both Activision and Blizzard are providing an incredible catalogue to Microsoft.
To begin to understand how the future might look, let’s first unpack how the current Activision-Blizzard business playbook is drafted.
It’s no secret that Bobby Kotick, and the board of directors, have pushed an aggressive brand destroying, but profit inducing, approach to how the company handles their games. This has been many of their flagship games to reach new heights, but also seen many fan favorites fall into the depths of memory.
Microsoft, on the other hand, has a completely different approach to how they operate gaming studios. Microsoft has proven, over the vast number of studios that they have acquired, that they are much more concerned with brand strength, than short-term profits.
This means we are likely to see a gear shift within Activision-Blizzard, returning to the brand building roots that both companies were crafted upon.
Slower game releases, more polish, more investment into fringe IPs, and more importantly, better workplace culture.
Overall, it is difficult to truly know how this will play out. However, if the sentiment of gamers, industry professionals, and the stock market is to be trusted, then the outlook is a hopeful one.
Xbox Game Pass – The Future of Activision-Blizzard Games?
The Xbox Game Pass has been a game-changer in the gaming world. Providing gamers with a Netflix styled subscription service that unlocked hundreds of AAA titles for them to enjoy. This Game Pass has grown year after year, now totaling a massive 25 million subscribers in 2022.
It’s no secret that the Game Pass itself embodies the future of gaming, especially as the emergent technology behind cloud gaming is becoming more and more a reality.
After the acquisition of Activision-Blizzard was announced by Microsoft, Phill Spencer, the head of Microsoft’s gaming division, was quick to announce that they will be “bringing as many titles from the Activision-Blizzard catalogue to Game Pass as possible.”
Whilst the details are not there yet, it’s clear that we will be seeing much of the famous Activision-Blizzard titles coming to the Game Pass, especially those that have a sole box price, and nothing else.
However, the elephant in the room is Blizzard’s crown jewel, World of Warcraft. With millions of subscribers all over the world, many gamers are wondering if their WoW subscription may become part of the Xbox Game Pass, providing an incredible boost in value to the king of MMOs, as well as perhaps reopening the door to many returning WoW players to engage in the newest expansion.
Will Anti-Trust Laws Get Involved?
Business publications have been floating the question of Anti-Trust laws getting involved, soon after the announcement of the acquisition. It wouldn’t be the first time Microsoft has been on the receiving end of an anti-trust smack down.
Whilst it’s unlikely the US government will get involved in the sale; the question is still open for other governments around the world. This is especially true for Europe, and the EU regulatory body that oversees the corporate landscape.
However, outside of the US, where both companies are primarily based, global government’s power to stop the sale is extremely limited. Meaning there is almost no chance, outside of the US government themselves, of this sale being blocked.
As it stands now, there is no sign that anti-trust laws will be triggered. However, it’s early days, and with the deal not set to fully complete until 2023, there is ample time for governments to get involved.
The Future of Microsoft Gaming Just Got Interesting
Microsoft has seen so shortage of failures in the gaming industry over the past five years, but has also been no stranger to success. With Phill Spencer’s new direction finally taking root, and Microsoft beginning to make big moves in the gaming world to secure large chunks of the creative talent, Microsoft Gaming has now become a serious contender in the industry.
Nobody, absolutely nobody, could have seen this acquisition coming. It has blind sided everyone, from industry professionals, all the way down to gamers themselves. Yet, despite the many concerns, there is no doubt that this signals a brighter future for the Activision-Blizzard studios.
Hopefully with a change of management, and company values, Activision-Blizzard can dig themselves out of the hole they’ve found themselves in for half a decade, and return to bringing us amazing games that we all enjoy.
What do you think of the Activision-Blizzard acquisition? Let us know down in the comment section!