Here's what I think about Microsoft buying Activision Blizzard - Part 1

 So, here I am, it's 12:30pm Wednesday January 19th that evening, with the faithful help of my colleague in the Austin chair, I had just completed this week's first issue in video games for 2022. We went back and dug the December 2021 headlines and those steamy early weeks of January where you could last up to three or four days without having to know what day of the week it was, we were thorough and we were sure that we finished and rendered this episode at 12:30 Wednesday that there wasn't a single gaming news worth talking about that we didn't include in this episode and we were right and then 12 31 happened here , we are witnessing a historic moment in the Microsoft industry, Activision Blizzard for almost $69 billion, meaning Xbox owns it now, and tons more in a deal said to be worth almost $70 billion. Activision was acquired by Microsoft. It took my brain a long time to process what was going on [ __ ] headline at 12 31 on Jason schreier's twitter feed and I'm like ha ha good joke jason and then I looked up the wall street journal article he was referring to and it was legit but it was just a rumor at the time it was one of those imaginative things you hear like guys there is a nintendo switch 2 coming this year and it will 4k have yeah sure mate so i figured it would be [ __ ] less than five minutes later boom official announcement from xbox like oh hey guys we just bought activision blizzard for almost $69 billion nice and that was that I had gone off the rails in five minutes never having imagined a deal like this thinking it was [ __ ] until it was confirmed that was a really wild five minutes and I was really pissed phil you wouldn't have 24 hours earlier can make one five hours earlier I was on vacation an hour earlier

For two weeks you had the entire window to announce this but no you were now 30 minutes before this week goes live in video games so the entire comments section was just people roasting me for missing the news , fair enough, I'll say it as I put together this week's next installment in Video Games, I realized very quickly that the entire episode was going to be consumed by this story because there's just so much to say rather than the details too save or miss out on the rest of the news In the industry, I decided to do this special bumper show that just talks about what I think will be the biggest video game news of 2022, adult world spin- off game by Gary Twitter, plus beyond the who, what, when, where and what the [ __ ] I also just wanted to have some space to talk about my reaction to all of this. It's not often that the tectonic plates of our industry shift like this, and try to squeeze my opinion into a 10 minute news blog w It could have been a challenge, so here's the story so far of the greatest video game merger of all time and what i think about that, if you told me six months ago that the state of california lawsuit against activision blizzard would eventually result in the sale of the company to one of the biggest tech giants on the planet i would have said wow i can't believe it that Activision Blizzard was bought for 10 cents, which began as a legal battle claiming a toxic and hazardous work environment would quickly result in a culling of Activision Blizzard executives and luminaries on a labor strike, demanding unionism and as senior executives are unwilling to take responsibility and fix the mess you made yourself It was only a few months after Activision Blizzard named Jen O'Neill as Blizzard's co-leader, whom she left because of waiting if they didn't pay her the same as the man who does the same job as her, you can believe that, can you believe, the balls on bobby coddick to give this woman a fair paycheck t environment

at this moment and when he's making $150 million a year himself there really couldn't be a clear example of how deep the bar had gone, that's a lie, of course there are clearer examples for all the other [ __ ] bobby coddick on on november 17, the wall street journal published a startling exposure claiming that bobby kotick, who up to that point had feigned complete ignorance of activision blizzard's cultural issues, was aware not only of those issues, but of at least some of them The article alleges that Kotick stepped in to protect a senior call-of-duty developer that HR ruled against in a sexual harassment case. He also brought up older confirmed stories about Bobby Kodak, such as the time he left a voice message threatening to kill his staff Assistant Codec would settle this incident in court and citing that he regrets the incident since am I'm sure he does, if later Wall Street Journal reports are to be believed that it was their report more than the California lawsuit or the dismissal of employees and all the pressure from the rest of the industry that would eventually lead to that Microsoft bought Activision Blizzard. Apparently Microsoft had offered Activision Blizzard in the past, but Kodak was cool with the idea of ​​detecting blood in the water and dealing with increasingly nervous board members open. Phil Spencer apparently led the deal, which worked over the holidays to land it about two months after publishing an article in the Wall Street Journal condemning Bobby Coddick and his code of conduct sold the company he ran for $68.7 billion to Microsoft. So let's talk about Bobby

First of all, it must be said that sometimes there is simply no justice in this world. Bobby Cody was paid $155 million last year, by the way, that's not a typo At the same time that some of his workers had to live in their cars because Blizzard wasn't paying a living wage at that very moment, the developers at Raven's studio, the Call of duty because a bunch of minimum wage quality workers got laid off. Not a good reason, these guys were making seventeen bucks an hour with no benefits. Bobby Kotak took home $155 million last year. You may remember Bobby Cody's fig leaf martyrdom, in which he refused any pay or stock until Activision Blizzard's culture crisis was well resolved, which didn't end up happening. Microsoft is paying $95 a share for Activision Blizzard, bringing Bobby Cody's starting payday to around $400 million. Talk about a golden parachute, but it will get better when t His deal was announced Microsoft made it very clear and very public that Codec would remain as CEO. Everyone flocked to that headline without really thinking about it. Start dictating or even signaling changes in senior management or corporate governance until that sale is finalized. The only thing they can say is that Bobby Codec will remain CEO, but of course he won't find a way to put Bobby Coddick in a rocket and shoot him in the sun, he probably would, but he will can't, this is more of a jeff bezos thing so phil is staying with kodak for now until he can politely ask him to go at this moment bobby coddick's second golden parachute

as pointed out by steven toledo of axios, if bobby kotak is removed as ceo, he will receive approximately $270 million, bringing his payday for this transaction to approximately $670 million. this is what i meant at the beginning when i said there is no justice in this world sometimes if one of us threatened to kill someone or help cover up sexual harassment in the workplace we would probably have a hard time getting our jobs to lose maybe more life would suck, at least a little bobby kotak on the other hand gets to put behind the cultural mess he caused and covered up at activision blizzard and the ongoing lawsuit from the state of california he can do it without getting angry about it, and he gets $670 million for it. People ask me what I'm thinking about this deal and my typical response was that I kind of feel like this deal sucks for a lot of reasons, most notably because it not only wipes out Bobby Cottick's sins but also rewards him handsomely for his transgressions I understand why it had to go down like that, it just sucks that Bobby Kotick couldn't go down first

it would make the company look bad sorry bobby the ship has already sailed add to this the growing calls for unionization which had a breakthrough this week when employees of the aforementioned raven studios formed the first union at a north american aaa spieleverlag founded sieg in their struggle to keep these quality assurance staff on the job there are many issues that plague activision blizzard and they won't suddenly go away with a change in management, but this change brings hope bloomberg's jason scream spoke to a number of employees and reported that many of them are expressing optimism about the acquisition, which makes sense given that Microsoft has gone through its own cultural shift over the past few years and has come out stronger. We just step back and let them do the things they do want to do. We haven't exactly seen the div end up as Microsoft's strategy as they've only been rolling with it for 2-3 years, but we absolutely saw this strategy pay off at Sony, so I don't think it's an untested thought experiment acts that Sony Studios has done. Their own cultural challenges are notably Naughty Dog and Crunch, but by and large most Sony developers comment that the freedom to make what they want to make is a really good thing, and if Microsoft can bring this to Activision Blizzard while they clean up the whole seedy sexual harassment thing. Then yeah, that's probably going to be a good thing for most Activision Blizzard employees, I say most because the reality is that some people thereby become superfluous. You can't merge two entities of this size without squeezing the support functions Talking HR Finance Ops Legal the administration and support functions that can scale across organizations so that game developers these employees are just as important as game developer employees and it will suck to see them as collateral damage in this merger, but yeah that's probably good

Deal for most Activision Blizzard employees, but I'm wondering if it's a good deal for Microsoft, so first I have to say that anyone who's really smart thinks this is a good deal for Microsoft, so have to I be really dumb when I think about it myself, I don't know, man, I can't quite see it. Microsoft acquired Activision Blizzard King for $95 a share, which is where the shares were trading before the California lawsuits began and before both Overwatch and Diablo 4 were delayed to 2023 for that $70 billion Microsoft got a whole bunch of studios including King, which prepares them for a strong push into the mobile space. You get Call of Duty, which is basically the number one console gaming franchise in the world, you get Blizzard with its IP library and its recurring wow, most importantly, you get access to about 390 million monthly active users, many of which are mobile, and in asia a platform and a geography where microsoft has struggled to gain a foothold under microsoft bough profits it's not a company that has around $8 billion in annual revenue, but only around two billion Dollars in profit per year, and in a world where a single mobile game like Honor of Kings can generate the same profit from just one game, Honor of Kings has actually made $13 billion in six years. the market says activision blizzard is worth almost 70 billion and the market is pretty smart so you're certainly right but i see this purchase in a very different light than i did the bethesda purchase for example i mean keep that in mind that a few years ago just a tenth the price and what they got Bethesda Games Studios with Fallout and Elder Scrolls and Starfield and Elder Scrolls online, they got Arcane Studios

and all her talent in ip id software doom quake not to mention the edtech engine a modern day marvel machine games with wolfenstein tango gameworks with evil within and ghostwire tokyo for seven billion dollars you have some seriously massive ips and a whole bunch of studios who just fired on all cylinders to make great games today what did you get with activision blizzard well cod is hitting a wall at the moment avant garde sales dropped 40 last year and there is already talk of it that Microsoft might abandon the annual release schedule that was the rock on which Activision was built, which is great news for Debs by the way, but it's less appealing to shareholders as Cod is still making mounds of money, albeit less than previously. Of course Microsoft has Blizzard and what is that today aside The huge cultural shift this company is undergoing has resulted in a massive brain drain of late that a top talent has left to start his own studio Dios Hell, look at that Former CEO Mike Moorheem's Dreamhaven, a new publisher with a slew of new studios under it, all staffed by former Blizzard luminaries, then there's Blizzard IP. I mean starcraft is dead right now and sure you could bring it back but how big is the rts market today a warcraft 4 sure but the rts genre is quite a niche again. Diablo 4. That's going to be big, but I'm also sure Diablo Immortal will make more money for Microsoft than Diablo 4, because luckily you can't monetize it Diablo 4 without everyone going crazy, then there's World of Warcraft , which many people think is still raking in endless cash, but it's not. Millions, that's not a lot of money for a company like Microsoft. I don't think Bobby Kotik was to blame for the problems inherent in the design of WOW After years of work we turned our backs and while New World reminded us that the market for mmos is still very big I don't think that we can expect wow to magically hit 10 million again