Microsoft announced a $69 billion deal on Tuesday to buy US gaming behemoth Activision Blizzard, seizing the sex harassment scandal-plagued company as the computer behemoth looks to expand its video game dominance.
Microsoft’s acquisition of ailing Activision will make it the third-largest gaming firm by revenue, behind Tencent and Sony, according to the company, signaling a huge shift in the expanding game industry.
“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,” Microsoft said in a statement.
Employee protests, departures, and a state lawsuit saying it permitted toxic workplace conditions and sexual harassment against women have hurt Activision, the California-based producer of “Candy Crush.”
According to The Wall Street Journal, the business has received around 700 reports of employee concerns about sexual assault, harassment, or other misconduct in the last seven months, in some cases several claims about the same occurrence.
Nearly 20 percent of Activision Blizzard’s 9,500 employees have signed a petition calling for CEO Bobby Kotick to resign.
“Acquiring Activision will help jump start Microsoft’s broader gaming endeavors and ultimately its move into the metaverse with gaming the first monetization piece of the metaverse in our opinion,” Wedbush analysts said after the news broke.
Troubled Activision
“With Activision’s stock under heavy pressure (CEO related issues/overhang) over the last few months, Microsoft viewed this as the window of opportunity to acquire a unique asset that can propel its consumer strategy forward,” Wedbush added.
Microsoft has just marked 20 years of the “Halo” video game franchise that turned its Xbox console into a hit.
Microsoft launched a host of initiatives to mark two decades of both Halo and the Xbox, including a virtual museum exploring key moments in the console’s history.
Xbox remains a key player in a video game industry now thought to be larger than the movie sector, with market research firm Mordor Intelligence valuing it at $173.7 billion in 2020.
Troubles, meanwhile, have stacked up for Activision over its sex harassment and discrimination scandal.
In July, California state regulators accused the company of condoning a culture of harassment, a toxic work environment, and inequality.
In September the Securities and Exchange Commission launched a probe into the company over “disclosures regarding employment matters and related issues.”
And two months later the Journal reported that Kotick, accused of mishandling the harassment complaints, had signaled he would consider stepping down if he failed to quicky fix the company culture. He has led the company for more than three decades.
Late last year chief operating officer Daniel Alegre pledged a 50 percent increase in female and non-binary staff over the next five years so that they will account for more than a third of Activision’s workers.
Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator, who writes ruthlessly about pop culture, religion, politics and entertainment.
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