What Does Microsoft Buying Activision Blizzard Mean For The Gaming Industry?

Attendees stand next to signage for Activision Blizzard Inc. Call Of Duty: Black Ops 4 video game during the E3 Electronic Entertainment Expo in Los Angeles, California, U.S., on Tuesday, June 12, 2018. For three days, leading-edge companies, groundbreaking new technologies and never-before-seen products is showcased at E3. Photographer: Troy Harvey/Bloomberg via Getty Images

If you’ve been following the gaming news recently, you’ll know that Microsoft has purchased Activision Blizzard. This incredible buyout is bound to have serious ramifications throughout the gaming industry; it’s not just a matter of one massive corporation purchasing another. Instead, this is the culmination of years of Microsoft’s strategy, as well as a highly controversial decision given some of the reasons Activision Blizzard (which we’ll refer to as ABK for clarity) has been in the news recently. Here’s a rundown of the purchase, as well as a look at what Microsoft buying Activision Blizzard means for the gaming industry.

This is the biggest purchase in gaming history

On January 10th, Take-Two Interactive, the parent company of studios like Rockstar, purchased mobile developer Zynga for a then-record-breaking $12.7 billion. At the time, that deal was the biggest and most expensive the gaming industry had ever seen. This Microsoft deal dwarfs Take-Two’s acquisition by a factor of 5.4, making this the single biggest gaming deal ever. This is two titans meeting in the field of commerce; Microsoft is now the third-largest gaming company in the world, having already acquired Skyrim and Fallout developer Bethesda last year.

Microsoft now owns all of Activision Blizzard’s properties

When the deal goes through – and technically, it hasn’t been finalised yet, but this step is expected to be a formality – Microsoft will own the rights to all of Activision Blizzard’s properties. That includes Call of Duty, Warcraft, Starcraft, and Diablo, as well as mobile franchises brought into the fold by King including Candy Crush Saga. This means Microsoft will own all of these franchises as well as Halo, Forza, Gears of War, and several Bethesda franchises, all of which are best-sellers. That should help to put this staggering decision into some sort of perspective.

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Activision Blizzard is a highly controversial company

Despite Microsoft seemingly being over the moon at purchasing Activision Blizzard, this isn’t a cut-and-dry transaction. Activision Blizzard has been beset by controversy in recent months following allegations of sexual harassment and a toxic workplace culture. These issues aren’t even close to going away; recently, rumours have swirled that CEO Bobby Kotick was planning to buy publications like Kotaku or PC Gamer in order to change and control the narrative around his company, which has quickly soured since 2021. Speaking of which…

Bobby Kotick might be too toxic to keep

Much of Activision Blizzard’s negative reputation revolves around CEO Bobby Kotick, who’s been in the news for a number of reasons, most of them bad. Kotick allegedly ignored female employees who told him about the abuses happening at Activision Blizzard, and what’s more, he apparently issued death threats to certain employees. We don’t know if he was being serious, but it doesn’t matter; Kotick’s name is mud in the gaming press, and it’s not really an option for Microsoft to keep him on for too long if they want to make sure Activision Blizzard isn’t a radioactive purchase for them.

Kotick could be out

The wording of the Xbox announcement is rather intentionally vague. It says that once the deal is finalised, ABK will “report to Phil Spencer”. Kotick, says Xbox, will continue to serve as the CEO of Activision Blizzard, and there’s no mention of whether or not this will come to an end once the deal is finalised. It’s likely Microsoft and Xbox have already made a decision, but are waiting to see whether the dust settles before they announce it. Intriguingly, sources have said that it’s likely Kotick will depart once the ink has dried on the deal, thus lending further credence to the theory that he’ll depart the company.

Activision Blizzard games will be on Game Pass now

As part of the acquisition, Microsoft announced that Activision Blizzard’s lineup will be making its way to Xbox Game Pass. Although all ABK games might not be present on the service, you’ll see a good chunk of games like Crash Bandicoot, Spyro the Dragon, and other ABK franchises; Xbox head Phil Spencer pledged to bring “as many Activision Blizzard games as we can” to Xbox Game Pass. This is undeniably good news for Game Pass subscribers, as it means the ranks for the service will swell with excellent third-party (or, now, first-party) offerings they can check out.

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Antitrust lawsuits may follow

There are some who say that Microsoft’s acquisition of Activision Blizzard constitutes building a monopoly. The only answer to that is to bring an antitrust lawsuit against Microsoft, which is a governmental responsibility rather than a private one. However, some have said that Microsoft’s acquisition of ABK probably won’t break antitrust laws, as it’ll be classed as a “vertical transaction”, which is to say a console manufacturer acquiring a games developer. While that’s technically true, the courts may see it differently; Microsoft is also a games developer and publisher, after all.

Other games companies are scrabbling

In the wake of the announcement that Microsoft had acquired Activision Blizzard, stocks for other gaming companies went ballistic. Sony, for example, lost around $20 billion of its value in one fell swoop, while stocks for Ubisoft and EA jumped, as did stocks for Take-Two. It’s clear that Microsoft’s decision will have seismic ramifications throughout the gaming industry; other giants like Sony may now decide to make big purchases of their own so as to shore up shareholder support, in a similar fashion to Microsoft’s decision.

It’s fair to say this is an absolutely monumental decision, and one that’s likely to have repercussions throughout the gaming industry for a lot longer than just the next few days. Other gaming companies will likely start to respond in kind before long, if only to challenge Microsoft’s increasing dominance over the gaming sphere. Services like Xbox Game Pass will only become more prevalent as a result of this, and the gaming landscape will likely change in ways we can’t even predict. What do you think of this deal?

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