Microsoft's Acquisition of Activision Blizzard

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Part of a series on Microsoft. [View Related Entries]

os PAGELOW 2018 Ryan Pagelow BUNICOMIC.COM

From: To: Sent: Subject: Phil Spencer </O=EXCHANGELABS/OU=EXCHANGE ADMINISTRATIVE GROUP (FYDIBOHF23SPDLT)/CN=RECIPIENTS/CN=MICROSOFT.ONMICROSOFT.COM-55760-PHIL SPENCER> Chris Capossela; Takeshi Numoto 8/6/2020 12:03:02 AM RE: random thought Takeshi, I totally agree that Nintendo is THE prime asset for us in Gaming and today Gaming is our most likely path to consumer relevance. I've had numerous conversations with the LT of Nintendo about tighter collaboration and feel like if any US company would have a chance with Nintendo we are probably in the best position. The unfortunate (or fortunate for Nintendo) situation is that Nintendo is sitting on a big pile of cash, they have a BoD that until recently has not pushed for further increases in market growth or stock appreciation. I say "until recently as our former MS BoD member ValueAct has been heavily acquiring shares Nintendo (https://www.reuters.com /article/us-nintendo-valueact-exclusive-idUSKCN2232VT) and I've kept in touch with Mason Morfit as he's been acquiring. It's likely he will be pushing for more from Nintendo stock which could create opportunities for us. Without that catalyst I don't see an angle to a near term mutually agreeable merger of Nintendo and MS and I don't think a hostile action would be a good move so we are playing the long game. But our BoD has seen the full writeup on Nintendo (and Valve) and they are fully supportive on either if opportunity arises as am I. Phil Confidentially we have two fairly active M&A discussions in Gaming right now, Warner Brothers Interactive and ZeniMax. I took ZeniMax to the BoD last week and prior to the BoD discussion I asked Amy and Satya if they wanted me to slow either or both of these given the TikTok discussions and they both emphatically told me "no". They are fine doing all 3 of these if the deals make sense. I won't say WB or Zeni is Nintendo but both are for sale and gettable by us if things align. Biggest obstacle in WB is IP ownership, we wouldn't own any of the IP which hurts long term flexibility and the only obstacle on Zeni is valuation expectations of founders. But I think it's likely one or both of these happen which will help us continue to double down on our Gaming relevance. To give a sense of scale, ZeniMax is about the size of our current first party studios org, so that would be doubling our content asset. Downside more core, less bro more north American/European etc. I love this discussion and value you looking at the opportunities here. At some point, getting Nintendo would be a career moment and I honestly believe a good move for both companies. It's just taking a long time for Nintendo to see that their future exists off of their own hardware. A long time.... :-) S 20 Uh... I can explain.

Beenox Microsoft RAVEN SPOD FOTO WIADRDE. You have freed us! TOYS BOB Microsoft RAVEN SUOJO FOTO WADRIE Oh, I wouldn't say "freed", more like "under new management."

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Overview

Microsoft's Acquisition of Activision Blizzard refers to the planned acquisition of video game publisher and developer Activision-Blizzard by the tech company Microsoft that was announced in January 2022. Following the announcement, the acquisition became a subject of viral discussions and memes on social media, partially in connection to the Activision Blizzard lawsuit.

Background

On January 18th, 2022, the tech company Microsoft^[1] announced that it was set to acquire Activision Blizzard, a major video game publisher and developer. The deal, once closed, will make Microsoft the world's third-largest gaming company by revenue in the world, behind only Tencent and Sony.

With three billion people actively playing games today and fueled by a new generation steeped in the joys of interactive entertainment, gaming is now the largest and fastest-growing form of entertainment. Today, Microsoft Corp. announced plans to acquire Activision Blizzard Inc., a leader in game development and interactive entertainment content publisher. This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse.

According to the official press release^[2] shared by Microsoft, Activision Blizzard was valued at $68.7 billion, or $95 per share for this acquisition, with the deal expected to close in the fiscal year 2023.

The planned acquisition includes iconic franchises from Activision, Blizzard and King studios such as Call of Duty, Warcraft, Diablo, Overwatch and Candy Crush. Developers that are subsidiaries of Activision Blizzard, including Treyarch, Raven, High Moon, Sledgehammer Games and Infinity Ward, will be considered Xbox First Party Studios once the deal closes (infographics shown below).^[3]

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On January 18th, 2022, Xbox's official Twitter^[4] account and video game industry insider Nibellion^[5] first broke the news, with their tweets gaining over 21,900 retweets and 86,400 likes and 6,100 retweets and 23,900 likes in three hours, respectively (shown below, left and right).

Xbox @Xbox Today is a historic moment. We are excited to announce that the world-renowned franchises and talented people at @ATVI_AB will be joining Team Xbox! Full announcement details here: xbx.lv/3fCovjY XBOX + ACTIVISION BIZARD ng WORLD WARCRAFT Candy Crush OVERWATCH DITBLO CALL-DUTY STARCRAFT TRI YARCH RAN HIGH MOON oeenox ity demonware TOYSIBOB 8:28 AM - Jan 18, 2022 · Twitter Web App

The news followed a turbulent year for Activision Blizzard as a long history of sexual harassment and workplace ethical issues at the company came to light, with the company facing both massive public backlash and a lawsuit brought on by the state of California.

Following the announcement, gaming journalist Jason Schreier tweeted^[6] an internal communications letter issued by Activision Blizzard CEO Bobby Kotick to the company's employees. In the letter, Kotick stated that the acquisition was set to be complete sometime in Microsoft's fiscal year 2023, ending on June 30th, 2023, and that until then, the company would continue to operate completely autonomously.

Developments

Bobby Kotick's Future

Although the press release issued by Microsoft states that Bobby Kotick, the current CEO at Activision Blizzard, will remain in his position after the deal, with Activision Blizzard business reporting to Microsoft Gaming CEO Phil Spencer, The Wall Street Journal^[9] reported that, according to its sources, Kotick is expected to depart one the deal closes.

Bobby Kotick, Activision's longtime CEO, is expected to leave after the deal closes, according to people familiar with those plans. Microsoft had said in its announcement Tuesday that Mr. Kotick "will continue to serve as CEO of Activision Blizzard," and that after the deal closes “the Activision Blizzard business will report to Microsoft gaming chief Phil Spencer. " But the companies have agreed that he will depart once the deal closes, the people said.

Online Reactions

Immediately following the announcement, the planned acquisition became a viral subject of discussions, jokes and memes online. Within three minutes of the news being shared, Twitch streamer Saberspark tweeted^[7] that Blizzard CEO Bobby Kotick should be fired out of a cannon, with the tweet gaining over 420 retweets and 3,400 likes in three hours (shown below, left). Within one hour, YouTuber SomeOrdinaryGamers tweeted^[8] a joke about playing Candy Crush on the Xbox Series X console, which gained over 310 retweets and 6,500 likes in three hours (shown below, right).

Saberspark O @Saberspark ... Now fire the Blizzard CEO out of a cannon and be done with him Nibel @Nibellion - 1h IT'S OFFICIAL: Microsoft has acquired Activision Blizzard news.microsoft.com/features/micro.. Show this thread XBOX + ACTVISION BIZZARD ung WORLD WARCRAFT Candy Crush DIABLO CALL-DUTY STARTRAFT OVERWATCH TRE YARCH RAVCN HIGH MOON inity ar demonware TOYSEBOB seenox 8:30 AM - Jan 18, 2022 · Twitter for Android

Mutahar @OrdinaryGamers About time I get candy crush on the series X Dexerto @Dexerto - 1h Breaking: Microsoft has agreed to buy Activision Blizzard for $70 billion Show this thread XBOX + ACTIVISION BIZARD ung Candy Crush WORLD DI(BLO CALL-DUTY WARCRAFT STARCRAFT OVERWATCH RAVEN HIGH MOON nity emonware TOYSIBOB TREYARCH Beenox 9:03 AM - Jan 18, 2022 · Twitter for Android

In the following hours on January 18th, 2022, multiple posts about the acquisition went viral as users shared their opinions on the development and joked about it (examples shown below). In some examples, the recently uncovered history of ethical problems at Activision Blizzard and the growing dislike for the company and its CEO were referenced.