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2 min read . Updated: 18 Jan 2022, 07:06 PM IST Acquisition of videogame heavyweight would make Microsoft the world’s third-largest gaming company by revenue
Microsoft Corp. agreed to buy Activision Blizzard Inc. in an all-cash deal valued at $68.7 billion, using its largest acquisition by far to grab a videogame heavyweight that has been roiled by claims of workplace misconduct.
The deal, if completed, would sharply expand Microsoft’s already sizable videogame operation, adding a stable of popular game franchises including Call of Duty, World of Warcraft and Candy Crush to Microsoft’s Xbox console business and its own games like Minecraft and Doom. Microsoft said the transaction would make it the world’s third-largest gaming company by revenue, behind China’s Tencent Holdings Ltd. and Japan’s Sony Group Corp.
An acquisition also would mark the latest and biggest move by Microsoft Chief Executive Satya Nadella to reshape Microsoft through a string of deals that have helped make the world’s second-highest-valued company a powerhouse in business computing and a rising giant in videogames.
The deal entails significant complications, too. Shares in Activision had been down nearly 30% since California regulators filed a lawsuit against the company in July alleging sexual harassment and gender pay disparity among the company’s roughly 10,000 employees.
Activision shares surged nearly 38% in premarket trading Tuesday after The Wall Street Journal reported it was close to a deal with Microsoft, whose shares fell 1.6%.
Microsoft said in its announcement that Bobby Kotick would remain as Activision’s CEO following the deal, and report to Microsoft gaming chief Phil Spencer.
Since the California lawsuit in July, Activision, Mr. Kotick, and its board of directors have been under intense pressure from shareholders, business partners, and others over the misconduct allegations. Following a Wall Street Journal investigative article in November about Activision’s handling of workplace issues, nearly a fifth of Activision’s roughly 10,000 employees signed a petition calling for Mr. Kotick to resign, and Mr. Spencer told Microsoft employees the company was evaluating its relationship with Activision.
Activision has announced a number of changes in recent months that Mr. Kotick has said are intended to make it a welcoming and inclusive workplace, including a zero-tolerance harassment policy and an end to mandatory arbitration for harassment and discrimination claims.
On Monday, The Wall Street Journal reported that Activision had pushed out or disciplined more than 80 employees since July as part of efforts to address harassment and other misconduct allegations.
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