In 2014, the combined market cap of Activision Blizzard was $18.6 billion dollars and their revenue was more than $4 billion dollars, making them one of the biggest companies in America. But now that Microsoft has bought a 39% stake in this company for approximately 3.8 billion dollars, what could it mean? What’s important to know is whether or not they will be able to maintain monopolies through unfair labor practices as well as maintaining profit margins with new technologies like cloud computing and streaming services
The “Activision lawsuits” is a case that has been in the news recently. The lawsuit is against Activision Blizzard for monopolizing the gaming industry and not paying their employees enough.
In the middle of the studio’s continuing reckoning with several claims of harassment and misbehavior, Microsoft made an unexpected addition to its development studio purchases, snatching up Activision Blizzard for over $70 billion. Following Microsoft’s spending frenzy in 2020 and 2021, during which the firm acquired a slew of smaller studios ahead of the launch of the Xbox Series X/S, this new merger has many wondering what the business’s and the gaming industry’s future holds.
With one major corporation owning dozens of smaller studios and some of the industry’s most well-known IPs — including The Elder Scrolls, Fallout, Doom, and now Warcraft and Call of Duty — the word “monopoly” is on many people’s lips, and some are wondering what it means for the industry when so many disparate entities come together under one name. For Activision Blizzard workers in particular, the answer is likely to be: not much in the immediate term.
What is the status quo at Activision Blizzard?
Blizzard Entertainment provided this image.
It’s certainly feasible that things will resume as usual for many of Activision Blizzard’s lower-level developers. After all, even after being part of the Microsoft family, the business will continue to develop games. Code must be written, assets must be rendered, and spoken lines must be recorded. However, as Ask a Game Dev points out, now that they have to answer to Microsoft, higher levels of management may see dramatic changes in the coming weeks and months. The whole connection between the studio’s actions and the aspirations of shareholders has evolved significantly as part of a bigger company. As a consequence, Microsoft may seek to take steps that would technically result in a “loss” for Activision, such as placing more of its titles on Game Pass or restricting the possible audience by making them Xbox exclusives, in order to boost the value of the Xbox brand overall.
However, it may be a more difficult issue for other departments. When Microsoft buys Activision Blizzard, some of the company’s more business-oriented divisions are unlikely to be needed as much, thus HR, accounting, legal, and other departments might be combined with Microsoft’s existing teams at best, or laid off at worst.
All of this might give plenty of ammunition for the labor movement’s continuing struggles. Workers’ collective A Better ABK, led by current and former Activision Blizzard employees. In the aftermath of the company’s harassment charges and the layoff of hundreds of QA personnel from subsidiary Raven Software, the organization has been pushing for workers’ rights for many months, but news of the merger has some members concerned. The official Twitter account of A Better ABK is holding fast, calling the purchase “surprising” but noting that it “does not impact the group’s aims.”
Others, however, are more cautious: activist and former Activision employee Jessica Gonzales tweeted, “I need to know Phil [Spencer’s] thoughts on unionization, and then I’ll be fine,” while Activision QA Tester Jiji Saari expressed concern, saying, “I’m pretty worried we’re going to be lost in the shuffle and just told to deal with it.” Saari’s concerns aren’t without merit — if you’ve been on the Internet at all in the last 12 hours, you almost certainly saw something about the merger, and there’s a risk that any other news about the company will fade into the background — and it’s doubtless disheartening to think that Activision CEO Bobby Kotick, who became entangled in the various controversies directly back in November, will be rewarded with a $300 million golden parachute after
With Microsoft in control, will there be a cultural shift?
Image courtesy of Microsoft
Even yet, the recently purchased Activision Blizzard studios may not be all doom and gloom. Back in November, Xbox CEO Phil Spencer voiced his “horror” at the charges leveled against the firm, and in an interview with the New York Times earlier this month, he discussed some of the ways Xbox has handled toxicity in its workplace and community at large. As a result, a new owner may be a positive step forward for the struggling firm. Indeed, with a (relatively) clean slate, Activision Blizzard might begin to adopt actions similar to those advocated by EA, fostering a safer and more compassionate working atmosphere.
Nonetheless, the new purchase sends a mixed message to workers’ rights advocates. For all the benefits that the merger may bring — if Microsoft really intends to reform the business — it seems almost contradictory to depend on the whims of massive corporations to fix these issues. In some respects, the protection of a bigger organization like Microsoft may make it more difficult for labor movements to push for change in the future, since its substantial power and resources may make strikes and unionization efforts more difficult to derail.
This is, in fact, the issue at the core of the “monopoly” problem. There may be debate about whether Microsoft is now a monopoly, but the reality is that the business today owns hundreds of smaller studios that collaborate to create content for the parent company. The ramifications of this are nearly completely dependent on Microsoft’s resource allocation decisions.
What influence may this transaction have on game development as a whole?
E3 provided this image.
On the one hand, Microsoft’s financial cushion has enabled many smaller developers to work in less stressful circumstances, knowing that they would be published in the end. Microsoft’s support of Double Fine, for example, is undoubtedly the major reason we finally got a sequel to 2005’s Psychonauts 15 years later, and plenty of other developers have gained more traction than they could have imagined by launching their games on Xbox Game Pass.
On the other hand, if Microsoft decides to use its influence with an iron fist rather than a velvet glove, workers’ movements in the sector may be stifled and unable to gather enough momentum to exert pressure on the software juggernaut. Furthermore, companies may be forced to conform their games into a crowd-sourced, focus-group mold, suffocating the innovation that customers have learned to appreciate. Even fans’ purchasing power may be limited – after all, how can you vote with your pocketbook when all of your favorite franchises are controlled by the same company?
For the time being, Microsoft looks to be kind in its oversight of its subsidiary studios. Given the company’s tumultuous last year or two, the situation with Activision Blizzard will be instructive, and might expose Microsoft’s long-term plan. In cases like these, it’s critical for wise and ethical customers to be informed, and worker alliances like A Better ABK and A Better Ubisoft are a wonderful place to start. Ultimately, no matter how many additional firms Microsoft acquires, its future business choices will be shaped by the wants and wishes of its customers — so making employee welfare a priority, and a loud one, can’t hurt.
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The “Activision Blizzard buyout lawsuit” is a document that was filed by Activision against the company. The document details how the Microsoft-Activision Blizzard buyout could mean for labor and monopolies in the gaming industry. Reference: activision blizzard lawsuit document pdf.
Frequently Asked Questions
What happens when Microsoft buys Activision?
A: Microsoft will create their own online multiplayer games, with a focus on console play. Activision is primarily an online game company that creates free to play and subscription based competitive video games.
How much did Xbox buy Activision for?
A: Microsoft bought Activision for $26.6 billion dollars as of September 26th, 2017
Did Microsoft buy Activision Blizzard?
A: No, Microsoft did not buy Activision Blizzard.
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