Activision Blizzard’s internal problems caused it to be acquired by Microsoft

As Bloomberg sources explain, it was the turmoil of Activision Blizzard and its CEO Bobby Kotick that served as an opportunity for Microsoft to make an offer the leader couldn’t refuse. Last November, in the face of press revelations, Phil Spencer as well as representatives of PlayStation and Nintendo carried an identical message, saying to themselves “disturbed and deeply troubled by the horrific events and actions” attributed to Activision Blizzard and its management. In an email to Microsoft employees, Phil Spencer said “assess all aspects of our relationship and make ongoing proactive adjustments” with the editor.

In a way, that was true, because at exactly the same time, behind the scenes, Phil Spencer was being asked by Microsoft management to take advantage of the situation to contact Bobby Kotick directly with one goal in mind: to make Microsoft well positioned to make an offer if Bobby Kotick decides to sell his business. This initially subtle interest would have turned into pure and simple desire for acquisition after only a few telephone exchanges over a period of two weeks from mid-November.

Honestly, it’s a deal that happened pretty quickly. I would say we had formal discussions about this opportunity at the end of the year and felt it was the right time to add the right resources and capabilities to both companies.“, confirmed Phil Spencer during an interview with CNBC. Microsoft’s offer came at a time when the pressure on Bobby Kotick had become more intense than ever. many changes to make his company a model of inclusion and equality, a Wall Street Journal investigation released in mid-November found him directly guilty of certain acts of harassment and of having long protected people guilty of similar misconduct , especially towards women.

One straw too many for the militant employees of the ABK Worker Alliance who, from that moment, never stopped to ask the resignation of the CEO. Employees who naturally intend to remain vigilant and maintain their demands from Phil Spencer once the company is officially owned by Microsoft, which won’t be until July at the earliest. “We support the goals and work of Activision Blizzard, and we also know that we will have important work to do once the acquisition is complete to continue to build a culture where everyone can work well.“, commented Satya Nadella, CEO of Microsoft.

Officially, Bobby Kotick will remain CEO throughout the process of integrating his company with Microsoft. The rest is obviously with big dots and it is already rumored everywhere that the 59-year-old leader is ready to leave once the operation is concluded. For Bobby Kotick, Microsoft’s (excessive) offer seems like a godsend that will allow him to leave the company naturally, instead of resigning under pressure. Already overpaid, the leader will also undoubtedly be entitled to a golden parachute in solid gold (we are talking about 390 million dollars), while giving the impression of having had his destiny in his hands. And the image matters: sources from the Wall Street Journal claim that this sacred Robert would have suggested seizing specialized publications, like Kotaku or PC Gamer, in order to restore the image of his company. An intention denied by a spokesperson for Activision.

Of course, Bobby Kotick denies any link between the pressure he had been under for months and the timing of the acquisition. His official speech: Phil Spencer would have just arrived at the right time, when Activision Blizzard realized that he was going to need additional resources if he wanted to remain of size in the future in the face of competition embodied by the Asian giants, GAFAM or still Netflix.

We have worked with Microsoft since the launch of Xbox. We’ve had many conversations over the years about various forms of collaboration, and as we’ve started to see new competition and we’re kind of at the beginning of what the metaverse will be, and in this race for the metaverse, it became clear that there are a variety of resources and talents that we need to be able to continue on this path. And so, as Phil and I started having these conversations, we realized it was the perfect time for a partnership.

We realized that the talent pipeline – we just didn’t have it.

Bobby Kotick

It is a reality that has begun to make us think. There is more competition from large companies that always have more resources. Facebook spends billions a year in the metaverse. I’ve never seen so much competition, and we even see it in wage inflation. Whether it’s Riot, Tencent, Epic, Sony, or Microsoft, EA, there are so many different places people recruit talent. And then you look at hard skills, like AI and machine learning or computer graphics. You have Nvidia and all these big companies recruiting top AI and computer graphics talent. And so we realized that the talent pipeline – we just didn’t have it. And we needed access to someone’s talent pipeline“, explains Bobby Kotick.

According to information from Bloomberg, the CEO was still hesitant before selling his company to Microsoft and took the time to sound out other giants, including Meta / Facebook, but no one was as interested as Microsoft, which yet thought he had to give up his brilliance for a moment. “Acknowledging Activision’s hesitation, Microsoft backtracked, telling the game publisher that it was happy to remain a mere partner. Eventually, Activision returned to the negotiating table, and teams from both companies worked through the holidays to close the deal. Microsoft brought in Dan Dees of Goldman Sachs and Activision hired Nancy Peretsman of Allen & Company. Although Nadella was involved when necessary, the bulk of the merger talks took place between Spencer and Kotick.“, reports Bloomberg.

Satya Nadella was already CEO of Microsoft when the computing and cloud giant decided to open its portfolios for good in favor of video games. In September 2014, the amount of 2.5 billion dollars for the takeover of Minecraft was already talking. However, it was nothing compared to the 7.5 billion dollars put on the table 6 years later to seize the studios and Bethesda licenses. By announcing the acquisition of Activision Blizzard King for almost 70 billion dollars on January 18, 2022, Microsoft has shown for good that it no longer intends to play in the same league as Sony and Nintendo.

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