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Microsoft announced plans Tuesday to buy Activision Blizzard — a huge leader in game development — in a deal valued at $75 billion. But the acquisition comes with significant issues. There have been numerous allegations of sexual misconduct in the Activision workplace. Geoff Bennett looks at those concerns and others behind the deal.
Microsoft announced plans today to buy Activision Blizzard, a huge leader in video game development, in a deal valued at $75 billion.
But the acquisition comes with significant issues. There have been numerous allegations of sexual misconduct in the Activision workplace.
Geoff Bennett looks at those concerns and what's behind the deal.
Judy, thanks to video games subscriptions and the Xbox, Microsoft is already a major player in the gaming market, an industry generating $175 billion a year in revenue.
But acquiring Activision will allow Microsoft to up its own game during a pandemic-fueled gaming boom. Activision is the company behind major hits like "Call of Duty, "World of Warcraft," and "Candy Crush." And the takeover would make Microsoft the world's third largest gaming company.
For more, we're joined by Kirsten Grind of The Wall Street Journal.
Thanks for being with us.
And, if you can, put this number in context for us, this $175 billion, the $75 billion acquisition. What does it mean for the gaming industry generally?
Kirsten Grind, The Wall Street Journal:
It's huge. It's just one of the biggest deals, period, one of the biggest all-cash deals.
And for the gaming industry, it really puts so much under one roof. So you had Xbox and now you have Activision's hits that will be Microsoft. So it gives Microsoft so much more might than it had before.
And Microsoft, which makes the Xbox consoles, owns studios that produce hits like "Minecraft," it's gotten more aggressive with gaming in the last several years. How does this acquisition play into their long-term tragedy?
Well, Activision has so many long term franchises. So, with the addition of Activision there, as you said, they become the largest gaming company by revenue worldwide. So, it absolutely, pending the deal's closure, makes them a very serious player in the space.
And this deal, as you know and as you have reported, this is coming as Activision faces multiple regulatory investigations into alleged sexual assault and mistreatment of female employees going back years.
And just yesterday, Activision fired several of its own executives following its own investigation, its own review of what transpired. Give us a sense of what is happening within that company. And has Microsoft indicated how it will handle it moving forward?
Well, Activision is really, quite frankly, in trouble with its culture at this point. It's facing three regulatory investigations, the state of California, the EEOC, the Securities and Exchange Commission. We have reported about mishandling of some of the misconduct allegations. Its stock is down about 30 percent from the first of the lawsuits about its culture last summer.
So it was facing pressure from employees, from shareholders. So this is a really — it's kind of a good solution, really, for Activision at this point.
And based on your reporting, I mean, do you know what happens to Activision's CEO, Bobby Kotick? He's led the company for more than three decades, but there were allegations that he was aware of some of these complaints of misconduct, harassment, even assault, but yet that he neglected to share it with the board.
We reported that in November.And that's actually kind of what led to Microsoft's approach when they were in the middle of all this turmoil after our story came out. And so Bobby actually is not expected to stay with the company after the deal closes. Again, these deals can take a very long time to close, and it's also pending a lot of regulatory approval.
But, yes, he's not expected to stay.
Can you give us a sense of the nature of what's been alleged?
So, some of the regulatory agencies have alleged sexual harassment, sexual assault, gender pay disparity, just a broad range of workplace misconduct across the board.
What we wrote about in our November story in The Wall Street Journal was about how Bobby Kotick himself knew about some of these workplace misconduct allegations and didn't tell the board about them.
Big picture, as we wrap up our conversation here, this acquisition is almost akin to Disney acquiring Marvel back in 2012.
Microsoft will now own a huge piece of the gaming industry, as we have been discussing. What does this mean for gamers generally?
You know, I think — going back to the culture questions, I think this could be a very good thing for gamers.
I think I heard a lot out there about how it was harder to get behind a company that was facing so many culture issues. And if a company like Microsoft can to help turn that around, I think that would be good for everyone, frankly.
Kirsten Grind, thanks so much for your reporting and your perspectives on this major deal between Microsoft and Activision.
Thanks so much for having me.
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Geoff Bennett is the chief Washington correspondent for PBS NewsHour. He is also a political contributor for NBC News and MSNBC.
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