You probably didn't see this one coming.
Microsoft is poised to acquire video game mega-publisher Activision Blizzard in a $68.7 billion deal. The Wall Street Journal reported this today, and the Xbox maker itself confirmed on Tuesday. While the deal isn't yet finished and is still subject to a regulatory process that could derail it, the move could potentially mark a seismic shift in the way competition plays out between gaming's three biggest hardware makers: Microsoft, Nintendo, and PlayStation.
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Activision is perhaps best known for its stewardship of the Call of Duty franchise, a blockbuster first-person shooter series that regularly leads the year's top sellers with its annual November releases. Case in point: According to retail and digital sales data compiled by market research company NPD Group, the two top-selling games of 2021 were Call of Duty: Vanguard, the series' 2021 entry, followed by its 2020 predecessor, Call of Duty: Black Ops: Cold War
Activision's library also includes well-known franchises like Tony Hawk, Skylanders, Spyro, and Crash Bandicoot. But remember: The deal here isn't just for Activision. Blizzard brings World of Warcraft, Overwatch, Starcraft 2, and the Diablo series. And King, the Sweden-based mobile games publisher that Activision acquired in 2015, has Candy Crush. This is a huge deal, far eclipsing Microsoft's 2020 move to acquire Elder Scrolls and Fallout publisher Bethesda Softworks.
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If the deal closes — which likely won't happen until mid-2023, according to a leaked internal Activision Blizzard email announcing the news — these top franchises will all be in a position to join the Xbox Game Pass library, the centerpiece of Microsoft's Netflix-like subscription service. That's very much the plan, Microsoft confirmed in its post announcing the pending deal.
"Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog," the post reads. "We also announced today that Game Pass now has more than 25 million subscribers. As always, we look forward to continuing to add more value and more great games to Game Pass."
Importantly, the deal could be harbinger for positive change at Activision Blizzard, which has been roiled by controversy since the summer of 2021 after a lawsuit filed by California's Department of Fair Employment and Housing cast a light on what numerous insiders described as a toxic workplace. But even as more details emerged in the months that followed and workers started to rally around an organized push for change, little seemed to come for the publisher.
Longtime CEO Bobby Kotick has continued on in a role he's held since the '90s, even as a report emerged in November that he knew about sexual misconduct allegations inside the company and, for years, failed to inform key stakeholders. It's not clear what the deal means for Kotick's long-term prospects. I think it's fair to speculate that he'll be pushed out within a year of the deal's close. But Microsoft has made it clear that he's sticking around for the time being.
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"Bobby will lead Activision Blizzard as CEO, as he has for the last 30 years," a Microsoft spokesperson told IGN. "Together, Bobby and Phil will work together to ensure the transition to this exciting new combined enterprise. The Activision Blizzard business will report to Phil after the close."
This is still likely a positive twist for Activision Blizzard workers in the long run. The Microsoft of the 2020s is a happy place to work according to its own employees. While there are surely those who might feel differently, this deal is set to bring about the kind of leadership change that Activision Blizzard's workforce has been demanding.
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