And how they need to step up to the plate and help fix its many problems
By Arjun Mehrotra
Things got crazy this month in the gaming world. When Microsoft announced that they were going to be buying ZeniMax Media for $7.5 billion in 2020, the world shook. But now they’re back with a deal 9 times larger than their last. On January 18, 2021, Microsoft acquired Activision Blizzard, creator of World of Warcraft, Overwatch and Call of Duty, for $68.7 billion, the largest deal in gaming, EVER. Recently, Microsoft has been buying large companies in an effort to boost their own name. They were pretty far down on the gaming company by revenue list, but now they’re in third, just below Sony and Tencent.
For months leading up the deal, Blizzard had been facing some problems. Around summer of 2021, they were sued by the California State Department of Fair Employment and Housing, or DFEH, for an alleged “frat-boy” and toxic culture. In their investigations, they found that Activision Blizzard, “Discriminated against female employees in terms and conditions of employment, including compensation, assignment, promotion, termination, constructive discharge, and retaliation.” They also found that many female employees were being abused and sexually harrased by higher ups. Frances Townsend, an executive vice president for corporate affairs at Blizzard, sent out a reply, stating that the DFEH had “rushed to file an inaccurate complaint,” and that they were “sickened” by their claims. The backlash was immediate. The next day, many employees organized a walkout claiming that the note was “abhorrent and insulting to all that we believe our company should stand for.”
Employees at a protest outside of Blizzard HQ in California.
This spread of corruption has started right with the core, CEO of Activision, Bobby Kotick. For years he knew about the allegations of sexual misconduct, but he did nothing. In 2006, one of his assistants said that he had harassed her, and had even sent a voicemail threatening to have her killed. The DFEH later found that Activision’s response was not made by Townsend, but had been drafted by Kotick and sent under her name. She later revoked her statement and was part of a revolt led by female employees at Activision. Over the years, many women have come forward to protest against Bobby Kotick and the model he was setting for other employees.
In August of 2021, Activision named Jennifer Oneal, an employee who had worked at Blizzard for years, the co-head of Blizzard. She resigned within three months however, because she and her male counterpart were being paid different amounts. She sent a message out to the Blizzard legal team, saying “It was clear that the company would never prioritize our people the right way.” She remembers being harassed earlier in her career, being Asian-American and gay, “I have been tokenized, marginalized, and discriminated against.” She sent a resignation letter to all Blizzard employees, ending by saying,
“And to everyone at Blizzard, thank you–for your honesty, your belief in a better future, and your incredible work ethic, creativity, and passion. You inspired me to find my own path in championing the cause for equality and my hope is that you inspire our players to do the same.” – Jennifer Oneal
It is clear that it was not the staff that Oneal was frustrated with, they were equally mad, it was the upper management who refused to lift their hands or remained oblivious to blatant inequality and harassment. So what do all these scandals mean for the deal? Well, it’s now Microsoft’s duty to conduct serious investigations and rebrand Activision as a safer, more equal place.
This acquisition also has major implications for the gaming industry. Having two major companies merge means less diversity in terms of games. It also brings up issues about monetization. If Microsoft now have a monopoly on games like Call of Duty and Candy Crush, they can add an insane amount of microtransactions and end up like EA. They could also make Blizzard games Xbox-exclusive, forcing PS players to make the switch.On the other hand, if Microsoft has less restrictions on Blizzard employees, then we could get some innovative and exciting games.
This deal has been huge for the Microsoft v Sony battle. The day after the announcement, Sony’s stock value plummeted by $20 billion. Microsoft’s game pass now has the opportunity to offer dozens more games, and until Sony’s Project Spartacus comes out, they will be losing money. That’s not to say that the great console war is over, however. Over the last few years, Sony has bought many companies as well, and will probably bounce back with their next console. They also recently bought Bungie for $3 billion, so they probably have big plans.
What we should probably worry about is industry consolidation. All of these larger companies are swallowing up indie devs like the big fish they are, and we might eventually find ourselves in a spot similar to the TV industry. These days, it seems like every movie company is coming out with their own subscription service, and companies like Disney own pretty much everything. This makes it extremely hard for anyone else to step into the industry, and continues the vicious cycle. Games are, however, more resistant to consolidation because they don’t require the massive budgets that movies do.
There is a whole bunch of controversy surrounding this deal, but there is also opportunity. Microsoft might turn out like a microtransaction filled company, but they might also nurture their game developers. We can’t say much for sure. But what we can say is that Microsoft needs to step up to the plate, deal with Activision’s problems, and keep pumping out games that the community loves.