The news: Microsoft announced it will acquire game publisher Activision Blizzard in a $68.7 billion deal that will turn the software giant into one of the largest game companies in the world and put some of gaming’s most lucrative intellectual properties under its umbrella.
More on this: Activision Blizzard is one of the gaming industry’s largest publishers, owning major franchises like World of Warcraft and Call of Duty, as well as mobile games such as Candy Crush Saga. These titles, among others, could now potentially be linked exclusively to Microsoft’s Xbox consoles and Game Pass subscription service.
The news comes as Activision Blizzard is battling a unionization effort and is reeling from a months-long sexual misconduct scandal, which stemmed from a lawsuit by the state of California alleging that the company cultivated a “frat boy” workplace culture in which women were paid less and harassed. Employees, fans, and critics have called for CEO Bobby Kotick to step down after a Wall Street Journal report revealed details of his involvement in the scandal, prompting gaming executives and companies—including Microsoft Gaming CEO Phil Spencer—to publicly criticize the company. Kotick will stay on as CEO of Activision Blizzard for the time being, per Microsoft’s announcement.
The challenge: The games industry is undergoing a tidal wave of consolidation, with large players like Microsoft, Tencent, and others purchasing game studios with increasing regularity. With a long list of major, lucrative intellectual property now likely to be under Microsoft’s wing, the deal may draw the attention of regulators that have spent the last few years ramping up challenges against Big Tech.
Editor’s note: Our Connectivity & Tech Briefing also covered this story today; here’s their take.