Microsoft agrees to buy Activision Blizzard for nearly $70 billion, a big bet on the metaverse.

[BumRushDaShow]

Source: New York Times

Microsoft agreed on Tuesday to buy Activision Blizzard, the video game maker behind hits like Call of Duty and Candy Crush, for $68.7 billion in cash. It is the largest takeover in Microsoft’s 46-year history and a big bet on its future direction. The deal plants Microsoft’s flag in the emerging battle for dominance in the so-called metaverse, the next-generation internet that melds the traditional online world with virtual and augmented reality.

It is also a challenge to regulators in Washington, as Democrats and Republicans alike have pushed to limit the power of technology giants. In buying Activision, which faced accusations of sexual harassment and discrimination that senior executives ignored, Microsoft appears to be rebuffing a controversy about the game maker’s workplace culture. The allegations have weighed on Activision, with its shares falling 27 percent since California sued the company in July over the matter. The game maker’s shares are up nearly 40 percent in premarket trading. Microsoft’s shares fell by 1 percent after the announcement.

The transaction may be seen as a victory for Bobby Kotick, Activision’s longtime chief executive, whom some critics had sought to oust over the controversy. Mr. Kotick negotiated a big premium for investors — Microsoft is paying $95 a share, roughly 45 percent above his company’s stock price before the announcement — and will continue running the company. Microsoft would gain Activision’s nearly 400 million monthly gaming users and access to some of the world’s most popular games, which are expected to form a cornerstone of the metaverse.

Combining with Microsoft will also give Activision access to a vast array of artificial intelligence and other programming talent. It would give Microsoft a significant boost in particular against Facebook, whose renaming of its parent company to Meta underscored its commitment to the metaverse. Adding Activision could bolster the virtual reality offerings from Microsoft’s Xbox unit as it competes with Facebook’s Oculus system.

Read more: https://www.nytimes.com/2022/01/18/business/microsoft-activision-bilzzard.html

[Orrex]

1. Great news for scorpions

[DonCoquixote]

2. on the one hand

It is nice to see that Zucky will have some competition for the future of cyberspace, on the other, it is a classic case of all of capitalism being merged into a group of people that could all fit comfortably on a 747. Too many eggs in one basket is telling the strongmen of the world that all they have to do is steal one set of controls, and then, they have the whole railroad, which they can gladly crash.

Of course, I do nto weep for activison. In the 80's, they were a plucky bunch of games designers standing in the way of Atari's attempt at world domination, now, especially thanks to world or warcraft, they have turned gaming into a mess. May the same fate happpen to Electronic Arts.

[BumRushDaShow]

3. Since MS is so huge and clunky

I think they were trying to breathe new life into some aspect of the company. They generally started as (and pretty much always have been) focused in the "operating system platform" space but have generally been also-rans with chasing the tech (including their attempts with mobile devices). However they did manage to get into the gaming space with the Xbox to take on juggernaut Sony when Sony was going through their own decline, so am guessing this will allow them to have something to feed that without the need for paying extra licensing fees for game product, etc.

[GB_RN]

4. MS Just Bought Themselves A Huge Legal Headache...

With Bobby Kotick. Activision/Blizz's sexual harassment issues aren't going away anytime soon, and Bobby is tainted himself. The guy has been accused of making death threats to a former secretary (IIRC) after she accused him of inappropriate behavior. That case was settled out of court.

Activision/Blizz had hired a former GW Bush admin attorney, Fran Townsend, who had responded to the California lawsuit against Blizz by basically stating that the lawsuit's allegations couldn't possibly be true, because in the time since she'd been there (at that point, all of THREE months), no one had harassed her! She stepped down as sponsor of the ABK Women's Network about two months later because of employee disgust, last August. As far as I know, the tone-deaf twit is still there in her corporate role, though. There have been more shenanigans since (like having male and female co-leads of Blizzard, and NOT paying the female the same as the guy, despite the guy asking that both be paid the same - and she ended up leaving not long after THAT came out*) that it would take WAY too long to get into. Shareholders want Kotick gone, and have filed a lawsuit.

*What makes THIS situation even worse, is that part of the the State of CA lawsuit against A/B is over pay disparities for same-position, same length of tenure, but white males being paid more than minorities/women.

Disclaimer: I own no stock in A/B. I have played many A/B games over the years, including its flagship game, World of Warcraft, but I am NO fan of Bobby Kotick and have NO faith in his leadership of the combined companies. He's a toxic POS, and as such, there's no way he can change the culture there. Unfortunately, the A/B board doesn't seem to understand this, or they're just as compromised as he is. It will take the shareholders to force a change, as player strikes, employee protests, etc, haven't made a dent in Kotick's insistence that he's the right man for the job.

[BumRushDaShow]

6. I would think by buying them

they could do a "Bye Felicia" on him and put someone else in charge of what will be a "unit" under MS and then pull out all the corporate farm of lawyers and settle whatever needs to be settled with respect to the guy. I am guessing they have some strategy in mind with the investors (unless the purchase terms are draconian, although they might have found some loophole to exploit).

I can't even begin to remember how many times MS has split its stock over the past almost 40 years since their stock went public (edit.. I did a quick search and apparently they have had 9 splits since 1987). MS is a so much bigger company (and knows how to play dirty).

[Calista241]

7. I'm sure they took that into account when buying the company.

There are ways for acquisitions to divest companies of legal liability and debt associated with past behavior. The valuable part of Activision was the digital game franchises and the 400m subscribers they have.

That doesn't mean the lawsuits are gone, just that the acquiring company is not on the hook for any liability. Some of that $70 billion will be set aside to address the lawsuits, which gives both sides incentive to settle. The new company with all the debt / liability won't have any way to generate new revenue, so the suing parties will need to get all they can, while they can.

[Sympthsical]

8. Yeah, that one surprised me

After everything, they're keeping Kotick? I would've thought that would've been the first room cleaned in that house. Eesh.

As a WoW player, hopefully things get better. This last expansion has been a shitshow, and I don't think that was all Covid.

People are optimistic, but we'll see.

I love that this was framed as a metaverse thing. Gamers largely do not care about this stuff. This is inside tech, and I think a lot of people like Zuckerberg and others in Silicon Valley are living in a bubble if they think anyone wants this. Remember Google glass?

I'm on zoom calls multiple times a day with school and work. The last thing I want is an extra layer of bullshit complication added to it.

[BumRushDaShow]

12. I just found this article -

Jan 18, 2022 9:40 am

Business

Activision Blizzard to report to Phil Spencer as CEO following Microsoft acquisition
It's unclear if Bobby Kotick will remain in charge of Activision Blizzard after the deal is finalized.

Leonardo Biazzi


Microsoft is set to buy Activision Blizzard in an all-cash transaction valued at $68.7 billion, which will be one of the biggest negotiations ever seen in the gaming and entertainment industry.

For now, Bobby Kotick will continue being Activision Blizzard’s CEO. When the deal is finalized, Activision Blizzard will report directly to Microsoft Gaming’s CEO, Phil Spencer. It’s not totally clear whether Kotick will stay on or leave after the transaction is concluded.

Link to tweet

The news of Microsoft acquiring Activision Blizzard comes just one day after the Wall Street Journal reported that Kotick had been hiding information amid sexual harassment and misconduct allegations surrounding Activision Blizzard.

Activision Blizzard has reportedly fired or pushed out “dozens of employees” and disciplined about 40 others since July 2021, when the California Department of Fair Employment and Housing sued the company over the alleged mistreatment of female employees.

https://dotesports.com/business/news/activision-blizzard-to-report-to-phil-spencer-ceo

TWEET TEXT

Nibel
@Nibellion
·
Jan 18, 2022
IT'S OFFICIAL: Microsoft has acquired Activision Blizzard

https://news.microsoft.com/features/microsoft-to-acquire-activision-blizzard-to-bring-the-joy-and-community-of-gaming-to-everyone-across-every-device/
Image
Nibel
@Nibellion
Activision Blizzard will report to Phil Spencer as CEO

"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 their catalogue"
Image
8:31 AM · Jan 18, 2022

I do actually think the VR is going to happen regardless though. They have to "unclunk" it but with the pandemic and "waves" of openings and closings, the whole "eSports" concept (I posted about it here - https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2854869) actually offers a way to have both "arena style" and "home" gaming more integrated.

[Sympthsical]

15. A lot of people would welcome that

I honestly cannot think of anyone who wants Kotick to stay. Most pundits and streamers I keep up with are shocked he's still there after that lawsuit landed.

[BumRushDaShow]

16. It sounded like the only reason was

$$$$$$ (ROI) promised to the investors.

[GB_RN]

20. Well, He's Behind On A Few Of Products...

There's a promised Diablo expansion that's nothing but vaporware for a couple of years now. Still no announcement on the next Warcraft expansion, and it should have already been announced.

Then there have been the game re-dos that have flopped, spectacularly.

Not to mention people have unsubbed on lots of products, too.

I would think his promised ROI is becoming vaporware, like some of the software.

[BumRushDaShow]

25. I think there are more and more indie developers out there

where if they (or someone) develop(s) a successful API, they can spread their games throughout the more "informal" social media realm (vs for those who use gaming rigs and developers need licensing to put their games on the platform). You can see how that played out with the Pokemon Go craze (that seems to have died down a bit) - i.e., you have more people of the demographics being targeted, using mobile than a console or rig.

By buying an outfit, they can get some big time recruiters to flash some $$$ in front of the developers and snap some of them up (although it wouldn't surprise me if a bunch are devoted to open source too).

Time will tell whether micro-management from the top will kill the end result.

[GB_RN]

26. The In-game Transaction Crap

Hurt Blizz's and by extension, WoW's reputation, for sure.

Kotick (in a Mr Burns-like voice): "Let's see just how much money we can scrape out of the players before they quit playing and we kill our cash cow!" (rubs hands together greedily)

[BumRushDaShow]

27. I agree

That just kills it - particularly how much crap is deliberately inserted in the games targeted to kids (e.g., all the "power ups", etc).

[GB_RN]

28. Ugh...

This was several years ago, when he was too young to know better, but I wouldn't let my kid play Candy Crush* for a while, until I unlinked my bank card from that damned game and the Google Play store. I didn't want him accidentally buying shit.

*For those who don't know, CC is owned by King, which is the "K" in ABK, or Activision/Blizzard/King. Bobby Kotick is an evil sumbitch.

[GB_RN]

14. For Sure

Metaverse? Pass. Especially if Fuckerberg has anything to do with it.

Shadowlands had SO much potential…🤷?♂️🤦?♂️
Definitely ready to skip past the shit show that this xpac is.

[Sympthsical]

18. I still have no idea what is going on

Ok . . . but what is the Jailer's plan?! What does "remake reality" even mean? And the massive retcon they're attempting. Oof. Blizzard needs new writers.

On the plus side, the raid seems fun. Guildies and I tried some of the fights out on PTR. The pantheon fight is great. But we all tapped out of 9.1 a few months ago. Got into mythic SoD and did a few things. I've largely just been doing vault stuff once a week and spending my online gaming time with Destiny 2 for some reason, which has a new expansion next month. Destiny 2, AoE 4, and Metroid have been my things when I have the time.

I'm just glad Zereth Mortis doesn't have the Maw aesthetic. Man, that gray was getting old.

[GB_RN]

21. Yeah, The Lore Behind Shadowlands...

Has been lacking. They could have done a MUCH better job explaining all of this, and I think Steve Danuser is a huge part of the problem in terms of that.

WoW could also use a redesign in terms of player interactivity with the story and the wall-o-texts we get: People tend to get glassy-eyed, and then you miss a lot of story.

[cstanleytech]

19. I quit WOW about 8 years ago mostly due to the

death of my mother which killed my interest in gaming for about 6 of those years.
The other reason was because I got fed up with how it seemed like to me that every expansion they kept changing how the classes would play and their abilities.
I mean some change is ok gradually but major changes I simply could no longer deal with.

[GB_RN]

22. I Hear Ya...

When they completely redid the DK play-style between WotLK and Cataclysm, it tweaked a few nerves for me. I hated how the UH DK felt after that. And it was all because they didn't want to have to deal with balancing the class, rather than buffing others, or whatnot.

You don't want Frost or UH to tank? OK, fine, but don't completely redesign how either of those do damage. And then redo it, and redo it...ad nauseam. They did the same thing to Demon Hunters after they launched that class in Legion. Total play redesign between Legion and BfA. 🤦?♂️

[cstanleytech]

17. Would it not have been wiser for MS to have simply

bought all of the rights and assets from Blizzard without buying the company itself or is that not possible?

[GB_RN]

24. Hard To Buy Just The Assets...

All the programming expertise, QA people, customer support, etc, who know the games inside and out would be gone and you'd have an established product with no support. Talk about a total mess.

[Calista241]

5. I guess they're tired of losing to Sony Playstation.

They've bought some big time studios recently, and are really going after the Playstation exclusive market, which beat them handily during the Xbox One / Playstation 4 era. The combo of Activision and Bethesda acquisitions makes Microsoft and Xbox the #1 place to develop and distribute games in the near future.

This is a really big deal. They'll have the Call of Duty, Warcraft, Diablo, Starcraft franchises in addition to Halo, Forza, Dishonored, Quake, Doom, Fable, Mechwarrior, Gears of War, Elder Scolls and more.

Microsoft is definitely coming for Sony Playstation.

[BumRushDaShow]

10. Plus Sony was late to come out with the PS5

and that might have signaled a move to acquire some more assets... Although what is now "Meta's" (Facebook's) resurrection of Occulus may be a/the real target too with "online VR" stuff including gaming (and perhaps MS's thought to adapt Activision's portfolio for the VR area).

You also have a recent proliferation of gaming venues like the one that Comcast (Xfinity) was building here in Philly down in the stadium area for "eSports" ) -

The construction has been paused at the moment due to the pandemic but at some point, I expect they will get back to it and stick something down there - perhaps with enhanced ventilation for virus mitigation).

Meanwhile a couple other "eSports" tournament venues have opened here including one called "Nerd Street" (and they have hosted tournaments) -

[pecosbob]

9. They've bought several of my favorite games since last summer

First the Fallout Series last summer and now Skyrim...of my most commonly played games only Total War remains outside of Microsoft's hands, and it's been owned by three different corporations since it was first launched, EA, Activision and Sega.

[Calista241]

11. And EA has an exclusive distribution agreement with Microsoft.

So Bethesda, Activision, and EA are all now exclusive to Xbox / PC. Playstation is going to have a lack of games in the future it looks like.

[Hugh_Lebowski]

13. Just Skyrim ... or Elder Scrolls franchise entirely?

I'm pretty ready for a new Elder Scrolls single-player campaign type of game at this point that's for sure!

[tavernier]

23. I usually get the pecan turtle blizzard.

It’s cheaper.

[GB_RN]

29. Lol

I see what you did there...