Microsoft (News - Alert) is poised to become the third largest global gaming company after revealing it will purchase Activision Blizzard in a $68.7 billion deal. The announcement comes as Activision (News - Alert) has been under fire for months over sexual harassment claims.
The buyout represents a giant push into the gaming sphere for Microsoft, which will rank only behind Tencent and Sony when the deal is finalized. Activision counts titles like Call of Duty, World of Warcraft and Candy Crush among its holdings. Microsoft said it will offer as many Activision Blizzard games as possible within its Xbox Game Pass and PC Game Pass once the deal closes.
Microsoft acquired Bethesda (ZeniMax Media) for $7.5 billion last March, providing a major boost to the Xbox Game Pass, which now has 25 million subscribers.
“We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all,” said Satya Nadella (News - Alert), CEO of Microsoft.
Activision has been plagued for months by allegations of sexual harassment and misconduct, beginning in July when it was sued by the California Department of Fair Employment and Housing for promoting a culture of "constant sexual harassment." Additional employees have made allegations of sexual misconduct since the lawsuit, with Activision reaching an $18 million settlement with the US Equal Employment Opportunity Commission in September. The settlement is being appealed, and close to 40 employees have exited the company since July.
Microsoft has not disclosed how it will handle the misconduct issues, but said current Activision Blizzard CEO Bobby Kotick will continue in his role for the time being. Once the acquisition is finalized, the business will report directly to Phil Spencer, CEO of Microsoft Gaming.
“As a company, Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players,” said Spencer. “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.”
Activision Blizzard operates in numerous global markets, which may make regulatory approvals complex for Microsoft. The company anticipates the deal will be finalized in 2023 because of those hurdles.