Microsoft intends to buy game provider Activision Blizzard for nearly $70 billion. If the competition authority agrees, Microsoft would become a giant in the gaming market. But Activision Blizzard is investigating a corporate culture that covers up sexual abuse.
“Candy Crush” could soon belong to Microsoft. A user enjoys the smartphone game, Los Angeles, January 18, 2022.
“Candy Crush”, “Call of Duty” and “World of Warcraft” could soon come from the same house as Excel, Word and Outlook: Microsoft wants to buy the gaming company Activision Blizzard and thus become a major power in the gaming market to develop.
By mid-2023, Microsoft wants to incorporate the takeover candidates, like the companies in a joint venture media release announced on Tuesday. Should the competition authorities in the USA approve this, Microsoft would then, according to its own statements, be the company with the highest sales in the global gaming market along with Tencent and Sony.
So far, Microsoft has been best known in the gaming scene for the Xbox console and the games “Doom” and “Minecraft”. With Activision Blizzard, Microsoft now wants to retain around 400 million more customers. Apparently that’s worth a lot to the company: it’s offering Activision Blizzard’s previous shareholders $68.7 billion, more than Microsoft has ever spent on a company takeover.
Boss brings sex toys on business trip
However, Microsoft could also get into trouble with the more than 9,000 employees at Activision Blizzard. After all, the game developer was sued by the state of California, where its headquarters are located, in the summer. The group has promoted a sexist corporate culture in which women were systematically disadvantaged, criticized the authorities responsible for maintaining fair working conditions.
Furthermore, female employees are exposed to constant sexual harassment, regularly have to fend off unwanted advances from their male colleagues and are regularly groped at company events, the authorities write in the complaint. High-ranking executives also took part in obvious sexual harassment without consequences. Among other things, a supervisor brought toys for anal sex and lubricants with a woman on a business trip.
Activision Blizzard initially denied the allegations, saying the authorities’ portrayal was not in line with corporate culture. However, the company later commissioned a law firm to process the events. Now she reports to investor conferences on progress in promoting women and minorities.
Fight for qualified employees
Despite the allegations and the investigation, Microsoft should welcome Activision Blizzard employees with open arms. Because the longer-term goal of the takeover should be a better starting position in the fight for power and market share in the metaverse. And that’s what creative employees of a gaming company are for.
A battle is raging between tech companies for the most talented employees to develop the metaverse. Microsoft has recently been on the losing side. According to research of the Wall Street Journal, around a hundred highly qualified employees resigned from their positions in the virtual reality (VR) and augmented reality (AR) departments at Microsoft last year. Most of them were later hired by the Facebook group Meta, which publicly committed itself to the Metaverse by changing its name in the fall. With Activision Blizzard, Microsoft is likely to bring in creative employees who are well versed in the development of virtual worlds.
So far, Microsoft has been known more for relying on AR than on VR, i.e. instead of virtual gaming worlds, more on intelligent glasses that show customers additional information about their environment – in principle similar to a heads-up display in the Car that projects the current driving speed onto the windshield. In the media release Microsoft is now writing on Tuesday that Activision Blizzard promises “building blocks for the metaverse”.
Competition authority should examine the deal closely
With the purchase of the games provider, Microsoft is now taking a step in the direction of virtual reality (VR), and is thus showing increased interest in virtual worlds, as they are used primarily in online games today. That should be lucrative, Activision Blizzard is currently making quarterly profits of $640 million, and the industry is growing strongly.
Before the takeover can take place, however, the American competition authorities have to approve the purchase. Many investors don’t seem to believe that, after all, Activision Blizzard’s share price rose by around 30 percent after the announcement, but not to the price that Microsoft made as a takeover bid.
The competition authority is likely to examine the deal very closely one way or another, after all, politicians are also increasingly discussing what should be done to limit acquisitions by the giant tech companies. In any case, the head of the American competition authority FTC has announced a tougher approach to tech companies, including when it comes to takeovers and mergers.