Microsoft pays nearly $70 billion for Activision Blizzard, the maker of Candy Crush and Call of Duty, in order to boost its quality in mobile gaming and virtual-reality technology.
About the Activision Blizzard deal:
The all-cash $68.7 billion for Activision Blizzard deal will turn Microsoft, maker of the Xbox gaming system, into one of the world’s largest video game companies and help it compete with tech rivals such as Meta, formerly Facebook, in creating immersive virtual worlds for both work and play.
If the Activision Blizzard deal survives scrutiny from U.S. and European regulators in the coming months, it also could be one of the priciest tech acquisitions in history since Dell bought data-storage company EMC in 2016 for around $60 billion.
Issue of Misconduct and unequal pay:
Activision has been buffeted for months by allegations of misconduct and unequal pay. Microsoft CEO Satya Nadella addressed the issue on January 18, in a conference call with investors.
“The culture of our organization is my No. 1 priority,” Nadella said, adding that “it’s critical for Activision Blizzard to drive forward” on its commitments to improve its workplace culture.
Activision disclosed last year it was being investigated by the Securities and Exchange Commission over complaints of workplace discrimination and in September settled claims brought by U.S. workforce discrimination regulators. California’s civil rights agency sued the Santa Monica-based company in July, citing a “frat boy” culture that had become a “breeding ground for harassment and discrimination against women.”
Wall Street saw the acquisition as a big win for Activision Blizzard Inc. and its shares soared 25% in trading Tuesday, making up for losses over the past six months since California’s discrimination lawsuit was filed. Shares of Microsoft slipped about 2%.
Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, which is behind popular video games The Elder Scrolls, Doom and Fallout. Microsoft’s properties also include the hit game Minecraft after it bought Swedish game studio Mojang for $2.5 billion in 2014.
The Redmond, Washington, tech giant said the latest acquisitions will help beef up its Xbox Game Pass game subscription service while also accelerating its ambitions for the metaverse, a collection of virtual worlds envisioned as a next generation of the internet.
While Xbox already has its own game-making studio, the prospect of Microsoft controlling so much game content raised questions about whether the company could restrict Activision games from competing consoles, although Nadella promised the deal would help people play games “wherever, whenever and however they want.”
About Microsoft:
Microsoft Corporation is an American multinational technology corporation which produces computer software, consumer electronics, personal computers, and related services.
Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975, to develop and sell BASIC interpreters for the Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by Microsoft Windows.
The company is run by a board of directors made up of mostly company outsiders, as is customary for publicly traded companies. Members of the board of directors as of July 2020 are Satya Nadella, Reid Hoffman, Hugh Johnston, Teri List-Stoll, Sandi Peterson, Penny Pritzker, Charles Scharf, Arne Sorenson, John W. Stanton, John W. Thompson, Emma Walmsley and Padmasree Warrior.
On March 13, 2020, Gates announced that he is leaving the board of directors of Microsoft and Berkshire Hathaway in order to focus more on his philanthropic efforts. According to Aaron Tilley of The Wall Street Journal this is “marking the biggest boardroom departure in the tech industry since the death of longtime rival and Apple Inc. co-founder Steve Jobs.”
On January 13, 2022 The Wall Street Journal reported the Microsoft’s board of directors plans to hire an external law firm to review its sexual harassment and gender discrimination policies, and to release a summary of how the company handled past allegations of misconduct against Bill Gates and other corporate executives.
