Activision Blizzard, which has been under fire from investors due to sexual harassment allegations and ongoing leadership turbulence, has pulled the trigger on a $68.7 billion all-cash agreement with Microsoft, which includes the company’s net cash. Activision Blizzard CEO Bobby Kotick has been rumored to resign amid ongoing SEC investigations and sexual harassment scandals at the company, which employs nearly 10,000 people (over 2,000 current and former employees signed a letter last year calling the company’s responses to a discrimination lawsuit “abhorrent and insulting,” and over 1,000 employees signed a petition calling for Kotick’s resignation).
According to the Wall Street Journal, Kotick was aware of sexual misbehavior and rape charges at his firm for years but did nothing. Despite this, Microsoft has stated that Kotick will continue to lead the company. Activision Blizzard will report to Phil Spencer, Microsoft Gaming CEO and Head of Xbox. “As a company, Microsoft is committed to our mission for inclusiveness in every part of gaming, among both employees and players,” Spencer wrote this morning in a blog post, alluding to Activision Blizzard’s ongoing turmoil.
“We also believe that creative achievement and autonomy are inextricably linked to treating each individual with dignity and respect.” This is a promise that we hold all teams and leaders. We’re excited to bring our proactive inclusion culture to all of Activision Blizzard’s fantastic teams.” It is unlikely that the news of the transaction will relieve workers’ fears if Kotick remains at the lead. Employees at Activision Blizzard have walked out in protest of not only the ongoing sexual misconduct allegations but also the layoffs of quality assurance contractors for “Call of Duty.”
Jessica Gonzalez, a senior test analyst, announced her departure in late November after establishing a reputation as one of the company’s most outspoken internal voices for change and emerging as a leader in the ABetterABK workers’ alliance. “Your inaction and inability to take responsibility is driving out brilliant personnel, and the products will suffer until you are removed from your role as CEO,” Gonzalez said in a resignation message that she shared on Twitter in Blizzard’s internal Slack. “This may appear harsh, but you’ve had years to improve the culture and assess where the company is now.”
In an email to Xbox employees in November, Spencer stated that he was “examining all elements of our partnership with Activision Blizzard and making ongoing proactive modifications” in light of the company’s complaints. Spencer asked about his company’s connection with Activision Blizzard in an interview with The New York Times last week before news of the deal became public. “This isn’t about us as Xbox putting other companies on a pedestal,” Spencer remarked. “Xbox’s track record isn’t perfect.” Microsoft recruited schoolchild dancers for a party during the 2016 Game Developers Conference, exemplifying the same “frat boy” attitude that has created so many problems for women in the gaming industry. “That was a difficult time in Xbox history,” Spencer remarked.
According to Microsoft’s own press release, this transaction will make Microsoft the world’s third-largest Gaming Corporation by revenue, trailing only Tencent and Sony, Mega-franchises such as “World of Warcraft,” “Call of Duty “and” Candy Crush” produced by Activision Blizzard, Microsoft Gaming develops Xbox systems. Activision Blizzard games will be included in Microsoft’s online gaming subscription Game Pass, which just topped 25 million customers. Activision’s games, on the other hand, have roughly 400 million monthly active users.