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Chances are that you’ve played a game made by Activision Blizzard at least once. The developer and publishing giant is behind megahits like Call of Duty, Overwatch, World of Warcraft, and many more. You probably know someone who plays Candy Crush on their phone. You might have grown up playing classics like Diablo and StarCraft. You’ve almost certainly seen games from its many subsidiary studios, including Treyarch, Sledgehammer Games, and Infinity Ward. Activision Blizzard is nearly impossible to miss in today’s gaming landscape.
It’s not just their games that have landed them in the news, though. Last year, a sexual misconduct and gender pay discrimination scandal came to light within Blizzard, prompting industry-wide outrage and condemnation. Walkouts and strikes ensued from disgruntled employees frustrated at Blizzard’s “frat boy” culture and lack of equal pay. The state of California sued the company. Activision Blizzard CEO Bobby Kotick later became the subject of controversy himself as allegations claimed he knew of the sexual misconduct issues at the company but chose to do nothing. Needless to say, the company has been in the news this year for all the wrong reasons.
That’s where Microsoft comes in.
What’s the deal?
On January 18th, Microsoft announced plans to purchase Activision Blizzard. In a news brief on their website, the company said that the goal of the deal is “to bring the joy and community of gaming to everyone, across every device.” This is likely a reference to Xbox’s Game Pass service, which allows subscribers to play a rotating selection of games on console, PC, and mobile devices either through traditional downloads or through cloud streaming. According to The New York Times, Microsoft will pay $68.7 billion for Activision Blizzard, an unbelievable sum. (And here we were thinking that Take-Two’s $11 billion deal to buy Zynga was going to be the biggest merger news of the month.) During the purchase period, Kotick will remain CEO of the company; after the ink is dry, “the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.” It’s unclear what that actually means for Kotick.
While Blizzard is likely the most well-known company within the Activision Blizzard group, Microsoft will also own King, the maker of Candy Crush, as well as Treyarch, Sledgehammer Games, and Infinity Ward, all of whom work on various titles in the Call of Duty franchise. That isn’t even the full list, either. It’s likely that this massive catalogue of studios, IPs, and games, as well as Blizzard’s (formerly) prestigious pedigree, are likely the biggest draws for a major buyer like Microsoft. It’s important to note that the deal hasn’t been finalized yet: it still needs to go through lots of legalese and regulatory requirements. Most believe that it will go through, though.
The news brief revealed the two main purposes behind Microsoft’s purchase: expanding Game Pass and placing faith in the metaverse. In the news brief, Microsoft noted that “This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud[.]” The company is planning to add Activision Blizzard games to Game Pass, which would be a huge draw for the already-popular service. The low price to entry – $9.99/month for PC or console, or $15.99/month for both plus mobile access – and access to a huge catalogue of popular games, including Microsoft’s “Day One” inclusion of its big-name first-party titles, have been a draw for a long time. Other services simply haven’t been able to keep up: Nintendo Switch Online + Expansion Pack has a goofy name, a mediocre selection of classic titles, and bad servers, while Sony’s PS Plus is significantly more expensive than Game Pass. With the Activision Blizzard acquisition, Microsoft is sitting on a Game Pass gold mine, and they know it.
The other reason cited in the news brief is a commitment to the metaverse. The metaverse is still a nebulous concept, but it involves using the internet, virtual and augmented reality, and games to create a sort of all-encompassing, livable digital experience. Facebook brought the concept to the eyes of the general public when it rebranded as Meta, where Mark Zuckerberg showed off a much-parodied idea of what the metaverse could look like. The New York Times reports that the purchase of Activision Blizzard would help Microsoft compete with Facebook’s Oculus VR system by “bolstering the virtual reality offerings from Microsoft’s Xbox unit”. The huge price tag behind the purchase really cements Microsoft’s belief in the metaverse and its desire to get there first, wherever “there” ends up being.
“Gaming is now the largest and fastest-growing form of entertainment,” Microsoft claimed in the news brief, citing “three billion people actively playing games today.” While the deal makes sense on paper, it’s still staggering to read about. The idea of a company as massive and well-known as Activision Blizzard being purchased by a console creator like Microsoft is almost unbelievable, as is the idea that games like Call of Duty and Overwatch will now be first-party Microsoft titles. What does this mean for these games’ esports scenes? How about exclusivity – which titles will be available on all consoles, and which will be kept as Microsoft first-party exclusives? There are a lot of unanswered questions, as the story – and the deal – are still developing. Even so, it’s no exaggeration to say that this is one of the biggest news stories ever in gaming.