Microsoft's Activision acquisition could reshuffle gaming
Microsoft's plans to acquire Activision Blizzard could not proceed as planned due to regulator pressure, but if it does: what will this mean for the future of gaming?
Microsoft's announcement regarding its $68.7 billion acquisition of game publisher Activision Blizzard has shaken up the gaming world as gamers all around the world wonder what the future of gaming will be with the vast Activision Blizzard library under Microsoft, which immediately made it a larger video game company than Nintendo.
Microsoft, who owns Xbox, said the purchase would better the gaming world, not shying away from mentioning the metaverse and saying it would advance its ambitions for the virtual universe.
The acquisition will see changes for all gaming platforms, especially those on consoles other than Microsoft's Xbox, and even for mobile gaming.
However, mobile gamers should not be concerned, as RBC analyst Rishi Jaluria asserted that there would probably be no changes at all "for the average person who is playing Candy Crush or anything else.
Industry watchers think this would be better for game development over the long run and more broadly, especially in the case that Microsoft's "games-for-everybody mission" and vast resources can rescue Activision from its reputation for abandoning audience-favorite franchises to focus on a few select projects.
Reportedly, Microsoft wants to "increase the variety of intellectual property." "Their target is anyone and everybody who plays video games and they want to bring that to a wider audience," said Forrester analyst Will McKeon-White.
Despite Microsoft's assurances, many fear that Xbox's maker controlling such a huge portion of the gaming industry could restrict many Activision games from competitors such as Sony's Playstation and Nintendo.
Activision has made certain games into free and mobile games before, such as the acclaimed Call of Duty franchise. Some say this could become Microsoft's model with several Xbox-owned games, such as Halo.
Evidently, former Microsoft acquisitions, such as DOOM and Minecraft, remained on all platforms despite fears of Xbox and PC exclusivity, so maybe Microsoft is not planning on turning the entirety of the Activision Blizzard library into exclusives.
Will the deal happen?
Microsoft is facing delays in a $16 billion acquisition of Massachusetts speech recognition company Nuance over a probe launched by British antitrust regulators.
Microsoft could become a new target for anti-trust among other tech giants such as Amazon, Google, and Meta, as regulators will definitely scope into what is possibly the biggest-ever tech acquisition.
The Biden administration underscored that it is moving toward strengthening enforcement against illegal and anticompetitive mergers; therefore, the deal may not take off anyway.
In case it doesn't, Microsoft would owe a break-up fee of $3 billion to Activision, which means the tech giant could make huge concessions to antitrust regulators to get the video game producer.
Not the best reputation for Activision
In July, employees demonstrated following a California state lawsuit against Activision Blizzard for allegedly allowing "constant sexual harassment" in its workplace environment, which means Microsoft's reputation could definitely take some damage over this acquisition.
In addition, a Wall Street Journal report revealed that the company's CEO Bobby Kotick was aware of the sexual misconduct for years and was an abuser himself.
In November, Activision was subject to criticism over desecrating and disrespectfully using Quranic text. The game developers included pages of the Quran on the floor of a Call of Duty Vanguard Zombies map, so Activision Blizzard doesn't necessarily have the best reputation. What would this mean for Microsoft?
Microsoft CEO Satya Nadella noted in an investor call Tuesday that "the culture of our organization is my No. 1 priority," adding that "it’s critical for Activision Blizzard to drive forward" on its commitments to improve its workplace culture.
"Activision Blizzard worker concerns must be addressed in any plan - acquisition or not – on the future direction of the company," Christopher Shelton, president of the Communications Workers of America, said in a statement.