In a huge, $68.7 billion purchase, Microsoft bought out Activision Blizzard, known for their behemoth games series such as “World of Warcraft,” “Overwatch,” “Diablo” and “Call of Duty.”
The purchase of Activision Blizzard will add them to Microsoft’s long list of owned game studios and related companies. It will also secure Microsoft’s place in the top three gaming companies in the world by revenue, just behind Tencent and Sony. Activision Blizzard was the seventh largest game publisher by revenue, according to Newzoo.
Activision Blizzard games are to become part of Microsoft’s Game Pass. It’s expected that, once the Activision Blizzard contracts with Sony are over, all future games developed by them, (including “Call of Duty”) will be PC and Xbox exclusives.
The deal is expected to be finished between July 2022 and July 2023.
This purchase is only one year after Microsoft purchased ZeniMax Media, parent company of Bethesda Softworks, creators of hit game series “Fallout,” for $7.5 billion.
The purchase is after a series of discrimination and harassment claims from employees following a lawsuit filed by California.
The California lawsuit alleged that there is a culture of gender discrimination at Activision Blizzard. A “frat boy” culture continues to thrive at the company where women make up only 20% of the 9,500 employees. The lawsuit alleged this discrimination includes compensation, assignment, promotion, termination, constructive discharge and retaliation.
The case describes a common pastime of cube crawls, “in which male employees drink copious amounts of alcohol as they ‘crawl’ their way through various cubicles in the office and often engage in inappropriate behavior towards female employees,” according to the course documents. “Male employees proudly come into work hungover, play video games for long periods of time during work while delegating their responsibilities to female employees, engage in banter about their sexual encounters, talk openly about female bodies, and joke about rape.
In one case, a woman took her own life while on a company trip after being subject to sexual harassment.
When the news broke about the harassment at Activision Blizzard, Microsoft Gaming CEO Phil Spencer called it “horrific” and said Microsoft was “evaluating all aspects” of its relationship with the company.
Microsoft has made it clear with this purchase that they are fully planning to revamp the toxic work environment at Activision Blizzard, or at least attempt to. Despite the current CEO of Activision Blizzard being expected to step down once the deal is closed, other organizations are quick to recognize the risk Microsoft could be taking on their own work culture.
“It says that the profit motive trumps those potential liabilities,” Y-Vonne Hutchinson, founder of inclusion consultancy firm ReadySet, told CNN Business. “It says, ‘We’re willing to bring on this company that has a ton of cultural problems — where there are rape allegations, allegations of deeply entrenched gender discrimination, sexual harassment -— we’re willing to bring that into the fold having it be unresolved.'”
Microsoft CEO Satya Nadella said culture is his “number one priority” during a conference call last week discussing the acquisition. “[Microsoft will have] significant work to do in order to continue to build a culture where everyone can do their best work,” Nadella said. “The success of this acquisition will depend on it.”