Microsoft buys Activision for $70bn

Hello! Welcome to our ongoing coverage of Microsoft's purchase of Activision Blizzard for an incredible $70bn. I'll point towards our articles on this breaking story throughout the evening, as well as any other relevant developments.

First up, here's our detailed story on the purchase itself, including quotes from the major players.

We've also got an opinion piece from Eurogamer editor Martin Robinson, who points out Microsoft buying Activision Blizzard isn't just a question of what it means for the games.

Meanwhile, Microsoft announced Xbox Game Pass now has over 25 million subscribers, which is a milestone that seems relevant in the context of the likes of Call of Duty, Diablo and whatever else Activision Blizzard releases coming to Game Pass from now on.

Last week Microsoft announced it would review its sexual harassment and gender discrimination policies - including allegations against Bill Gates. That announcement has extra meaning in the context of Microsoft's purchase of Activision Blizzard, which is embroiled in an ongoing sexual harassment lawsuit itself.

It's worth pointing out this deal has yet to receive approval from financial regulators. Microsoft has said it expects to get the deal over the line by the end of its 2023 financial year (by 30th June 2023).

There are a lot of unanswered questions, chiefly: will Activision Blizzard boss Bobby Kotick leave the company? Reading between the lines of the various lawyer-approved statements issued today, the suggestion is Kotick will make his exit after the deal is complete.

And what does the deal mean for Activision Blizzard games on PlayStation and Nintendo consoles? Is Call of Duty Xbox exclusive now?

New York Times reporter Karen Weise spoke to Bobby Kotick today and asked him if he will be CEO after the deal closes: "Post close I will be available as needed."

ABK Workers Alliance, a group that represents staff at Activision Blizzard King, has issued a statement on Twitter in reaction to the news: "The news of Activision's acquisition by Microsoft is surprising, but does not change the goals of the ABK Worker's Alliance. "We remain committed to fighting for workplace improvements and the rights of our employees regardless of who is financially in control of the company. "We will continue to work alongside our allies across the gaming industry to push for measurable change in an industry that desperately needs it. We called for the removal of Bobby Kotick as CEO in November for shielding abusers and he still remains CEO as of this writing. "The strike for Raven QA is in its fifth week, and our striking staff has still not received response from leadership regarding our request to negotiate. "And finally, 3 out of 4 of our original collective demands to improve the conditions of women in our workforce have not been met. "Whatever the leadership structure of the company, we will continue our push to #EndAbuseInGaming, and appreciate the outpouring of support we've experienced in the last year."

Lalaland: There will be no news of Kotick until after the deal closes. I worked in Symantec when they were acquired by Broadcom. We knew they didn't want us but all we heard were promises of strong growth right up until the deal closed and then it was P45 time. With a "yeah we meant all that for people who are not you in the company" Board level positions are considered "material information" to the capital markets so saying whether he will or will not be there after the deal closes is forbidden by law

This sounds relevant!

Bloomberg reports Activision Blizzard CEO Bobby Kotick "will continue to serve in that role only until the deal closes, a person familiar with the deal said. It’s unclear what position, if any, he would take afterward".

The WSJ has an even firmer report on the future of Kotick: "Bobby Kotick, Activision’s longtime CEO, is expected to leave after the deal closes, according to people familiar with those plans."

According to the WSJ, Microsoft approached Activision about a deal in November last year.

WSJ again, with a quote from Phil Spencer on the Activision deal: "'We see the progress that they're making that was pretty fundamental to us deciding to go forward here,' Mr. Spencer said about Activision’s plans to address workplace issues."

Here's our report on the question of Activision Blizzard games potentially going Xbox exclusive in the future.

There's a special episode of the Eurogamer Newscast, all on Microsoft's $70bn purchase of Activision Blizzard, at the top of this page. Give it a watch to get reaction from Martin Robinson, Tom Phillips and Chris Tapsell!

Reacting to Microsoft's $70bn purchase of Activision Blizzard, Xbox co-creator Seamus Blackley tweeted to say he is "sickened that the reward for years of despicable practices toward developers seems to be a huge payday for its perpetrators". "My hope is that the acquisition will cause the Activision culture to change, and may catalyze some accountability for those who have so far avoided it." "I strongly believe in @XboxP3 as a leader and an executive. I think this is a very insightful move and could represent a huge win for Xbox," Blackley continued. "There are daunting challenges in all large acquisitions I just see the issues of developer culture as being paramount here, before all else." "It’s terrifically, incredibly, head-meltingly weird to see little baby Xbox eat up Activision. Some still at Activision will recall a young Seamus showing up claiming things about a new game console, only to be essentially mocked. I wonder if today they remember that. "I do."

As Microsoft has said, its deal to buy Activision Blizzard makes it the third-largest gaming company by revenue, behind Tencent and Sony.

Daniel Ahmad, Senior Analyst at Niko Partners, tweeted to put numbers to that list (as of 2020, with MS/Activision revenue combined for that year): 1. Tencent - $29.30bn 2. Sony - $22.67bn 3. Microsoft - $21.9bn

Microsoft published two images to go along with today's announcement, the first of which, below, shows off the brands it's picked up from Activision Blizzard.

The second, below, shows Microsoft Gaming's new leadership team, with CEO Phil Spencer at the top of the tree.

"With Activision’s stock under heavy pressure (CEO related issues/overhang) over the last few months, Microsoft viewed this as the window of opportunity to acquire a unique asset that can propel its consumer strategy forward." - Dan Ives, an analyst at Wedbush Securities, as reported by Bloomberg.

Also from Bloomberg: "In an interview, Kotick said the deal has nothing to do with the controversy surrounding Activision or calls for him to step down and that Spencer reached out to him last year. "A person familiar with the discussions, who was not authorised to speak publicly, said Microsoft looked at Activision’s situation, given all the negative attention and pressure on Kotick, and wondered if the beleaguered CEO would be willing to do a deal. "Kotick initially didn’t want to sell, according to another person familiar with the talks, and also put the word out to see if any other company would outbid Microsoft. But at that point, Kotick had little leverage with his board amid the ongoing public scrutiny at his company."

And here's a Digital Foundry Direct Special: Microsoft Buys Activision/Blizzard - Initial Reaction! Speculation! More! Audi Sorlie, Alex Battaglia and John Linneman enter the war room to discuss what this could potentially mean for Microsoft and the video game industry itself.

According to a CNBC source, Activision Blizzard contacted a financial firm to work on topping Take-Two’s $12.7bn acquisition of Zynga before agreeing to sell to Microsoft this weekend.

Here's a note to press from analyst firm Wedbush on Microsoft's $70bn purchase of Activision Blizzard and what it means for game exclusivity: "The game library affords Microsoft the opportunity to offer Activision Blizzard games exclusively on its Xbox Series X/S console, but that opportunity may be foiled by antitrust regulators. "We expect the Federal Trade Commission and the U.S. Justice Department to scrutinise the transaction and to determine the potential impact on Sony’s PlayStation console sales should Activision Blizzard games be offered exclusively on the Xbox platform. "Because Call of Duty has been the bestselling game over the last 18 years on the PlayStation platform, we think it is likely that regulators will restrict the terms of the combination and require Microsoft to continue to offer Activision Blizzard (and perhaps other) games to Sony under substantially the same terms as it has been offered in the past."

That's it for this evening's live coverage of Microsoft's $70bn purchase of Activision Blizzard. Thanks for reading!