Yesterday, Microsoft shocked the world by announcing its plan to acquire Activision Blizzard. Activision Blizzard is known for popular franchises like Call of Duty, Diablo, Overwatch, StarCraft, and World of Warcraft. While the majority of discussions have been around game exclusivity and the fate of current Activision Blizzard head Bobby Kotick, new details have emerged that tell us about other players that wanted to buy the company.
In a recent interview between the embattled Kotick and VentureBeat, the executive revealed that Activision Blizzard needed a partner with thousands of employees to carry out its long-term vision. The fact that Microsoft paid a 45% premium over the stock price didn't hurt either. Kotick said the following.
We were looking at over the course of the next couple of years, and starting to realize that we need thousands of people to be able to execute against our production plans ... And that competition for that talent is expensive, and really hard to come by ... And so when Phil called, it happened to be at a time where we were getting ready to start our long-range planning process, and realizing that these were going to be issues and challenges ... When they originally called, we said we would we think about it, and then they made this offer that was incredibly attractive at 45% premium over the stock price. And I think it just made a lot of sense.
However, it turns out that EA — the company behind Battlefield and FIFA — was also interested in merging with Activision Blizzard. Kotick let slip that he was considering consolidating with EA, but it wouldn't have given Activision Blizzard the resources needed for the future.
But when you’re comparing us to, you know, $2 trillion companies and $3 trillion companies ... you realize, we may have been a big company in video gaming, but now, when you look at the landscape of who the competitors are, it's a different world today than ever before ... But I think that even if we were to have consolidated within EA, that wouldn’t have given us what we're going to need going forward. And so you needed to have a big partner in order to be able to make it work.
The interview is an interesting glimpse into the deal. Kotick didn't touch upon his future at Activision Blizzard, but the latest reports suggest that he's departing after everything is finalized with Microsoft.
According to a report by Eurogamer, current Activision Blizzard employees are cautiously optimistic about being taken over by Microsoft. Hopefully, head of Microsoft Gaming Phil Spencer and his team will be able to improve the situation at Activision Blizzard once the deal goes through in late 2022 or early 2023.
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