Analysis: Microsoft’s Acquisition of Activision Blizzard is a Mixed Bag For Gamers

Thomas Wilde
Thomas Wilde has been working as a journalist and editor in the gaming press since 2002, most notoriously as the editor for DoubleJump Books. He has personally won World War II 47 separate times. Follow him on Twitter @stolisomancer and reach him at games@geekwire.com.
Analysis: Microsoft’s Acquisition of Activision Blizzard is a Mixed Bag For Gamers
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Last year, I joked that the problem Microsoft presents for video game analysts is that it could, at any time, suddenly disrupt the entire industry by deciding to buy the moon.

Microsoft’s pending $68.7 billion purchase of Activision Blizzard, announced Tuesday morning, doesn’t have that kind of impact, but it’s not that far off.


By buying Activision Blizzard, Microsoft has once again grabbed some of the highest-profile franchises in video game history, including "Call of Duty," "Candy Crush," "Warcraft," "Diablo," and "Starcraft." There’s little if any precedent for this kind of thing in video games’ short history.

Gobbling up talent

The biggest name on Activision Blizzard’s list is indisputably "Call of Duty," a series of military-themed first-person shooters. By alternating production between several studios, Activision has been able to release a new "Call of Duty" every year since 2005, and since 2007, each new version of "Call of Duty" has become a reliable success.

Xbox\u2019s various game developers it now owns: Activision, Blizzard and King.Xbox’s various game developers it now owns: Activision, Blizzard and King.

Despite middling reviews, "Call of Duty: Vanguard,"the 18th installment in the series, was the No. 1 best-selling game last year, with the previous installment, 2020’s "Black Ops – Cold War," coming in at No. 2.

"Call of Duty"’s popularity has traditionally come from its best-in-class multiplayer modes, including the famous “Zombies” cooperative campaigns. Its solo content, on the other hand, is often treated as an afterthought.

In order to maintain that annual release schedule for "Call of Duty," Activision has gradually assembled an internal network of development studios that includes some of the best talent in modern action gaming. This includes Infinity Ward, which began the "Call of Duty" series in 2003; Raven Software ("Heretic," "Singularity"); and Sledgehammer Games.

When added to the lineup that Microsoft acquired by purchasing Bethesda in 2020, that puts most of the best brand names and developers in modern first-person shooters under the Xbox roof. A single company now owns "Halo," "Doom," "Overwatch," and "Call of Duty," with the possibility for a shared, cross-pollinated pool of talent.

Impact on the ground

For customers, this initially looks like it could be a good deal. Microsoft has already announced that it plans to add multiple Activision Blizzard releases to its Game Pass subscription service, which recently surpassed 25 million subscribers. Activision alone has a 40-year backlog of hits that it could throw onto Game Pass, even before it cracked into "Call of Duty." (Bring back "Singularity," you cowards.)

As with Microsoft’s last major video game acquisition, however, this raises some troubling issues over consolidation. By buying Activision Blizzard, Microsoft has grabbed up one of the biggest independent developers in the world, again, and made it a first-party Xbox studio.

While it’s fun to think of the possibilities this offers, such as an Xbox answer to "Super Smash Brothers" where the Master Chief could fight the heroes from "Overwatch" (yes, I am still going on about this), it’s also Microsoft bringing another massive chunk of the modern games industry under its direct control. This isn’t a monopoly quite yet, but it’s worth asking the question: is it really the best thing for video games and the people who play them when a single company controls this much of the space at once?

Blizzard’s fall from grace

Microsoft\u2019s largest acquisitions of all time.Microsoft’s largest acquisitions of all time.Geekwire

Activision Blizzard is a holding company that was established in 2008 as a merger between the independent developer Activision, operating out of Santa Monica, Calif., and Vivendi Games, the parent company of Blizzard Entertainment, based in Irvine, Calif.

The two halves of Activision Blizzard, as far as the typical consumer is concerned, operate independently. Activision has been publishing video games for every platform it can reach since 1980, including a stint as Bungie’s publishing partner for "Destiny," while Blizzard built its name by making some of the most notoriously addictive games in the world.

Compared to Activision, however, Blizzard has seen much better days. While its tentpole franchises, including "Overwatch," "Warcraft" and "Starcraft," are still relevant in 2022, Blizzard has suffered a notorious “brain drain” in the last few years. Most of its founders and key developers have left the company, many of whom appeared to be leaving one step ahead of potentially career-ending scandals.

The internal culture at Blizzard had reportedly become so toxic that the state of California filed a suit against it in mid-2021, alleging that it fostered a “a pervasive ‘frat boy’ workplace culture” where female employees were subjected to “constant sexual harassment.”

Against that backdrop, it’s hard not to see Blizzard as the weaker link here. It’s still got potential if Microsoft cares enough to develop it, but it’s in dire need of a top-to-bottom realignment before anything else can get done.

That, however, may actually be a possibility. The current CEO of Activision Blizzard, Bobby Kotick, is widely perceived as a significant driver of Blizzard’s many and varied workplace issues, which he allegedly ignored or expedited in order to maximize the company’s profits. Kotick has recently been the subject of multiple reports in The Wall Street Journal, one coming as recently as Monday morning, that accuse him of covering up allegations of workplace abuse.

Under the terms of Microsoft’s acquisition, Xbox head Phil Spencer is now the CEO of the newly founded Microsoft Gaming division. Spencer sent an email to Xbox staff on Tuesday morning that said, among other things, “We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect. We hold all teams, and all leaders, to this commitment. We’re looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard.”

If the acquisition goes through as planned, Spencer would effectively be the head of Activision Blizzard. While it’s not entirely clear at time of writing whether that means Kotick is out, it is suggestive that he wouldn’t have quite as firm a grip on Activision Blizzard’s steering wheel.

LA’s Data Center Supply Crunch

🔦 Spotlight

Happy Friday Los Angeles!

The Los Angeles data center market is experiencing a significant supply crunch, ranking 12th in growth among top markets since 2020 with only 265 megawatts of colocation inventory (data centers where businesses rent space to store their computing hardware and servers). Despite this, demand is surging, driven by AI, cloud, and hyperscaler needs, with AI accounting for 20% of new data center demand nationally. This scarcity is creating a highly competitive environment, with vacancy rates at a record low 3% and asking rents rising 13-37% year-over-year. For Los Angeles, this presents both challenges and opportunities in the big picture. The city's strategic position as a global entertainment hub and its connectivity to international markets through subsea cables make it an attractive location for data centers. However, the limited inventory and rising costs could potentially hinder growth and innovation in the tech sector. To maintain its competitive edge, Los Angeles will need to address these constraints through new developments, such as GI Partners' 16 MW addition at One Wilshire, and by focusing on high-connectivity, high-power capacity submarkets. The city's tech community should prepare for a landscape of increased competition for quality data center space, higher costs, and the need for innovative solutions to meet growing demand, particularly in AI and cloud services. While Los Angeles faces a challenging data center supply crunch, its strategic advantages and ongoing developments offer a promising path forward.


🤝 Venture Deals

LA Companies

  • Daisy, a one-year-old startup that designs and installs smart home and office technology systems, raised a $7M Series B co-led by Goldcrest and Bungalow, with previous investors Bullish and Burst Capital also stepping up. The company has raised a total of $13.3 million. - learn more

LA Venture Funds


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    LA TECH CEO SUMMIT

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    🌐Decentralizing Data & Vacations: Sony's Web3 Leap and Sensible Weather's KOA Partnership

    🔦 Spotlight

    Happy Long Weekend Los Angeles!

    Sony Group is making a significant push into the blockchain and Web3 space, leveraging its Sony Pictures and Sony Music divisions along with a new global incubator. The company has developed the Soneium blockchain through Sony Block Solutions Labs, a joint venture aimed at accelerating Web3 innovation. Sony is launching the "Soneium Minato" public testnet and a developer incubation program called "Soneium Spark" to foster ecosystem growth and adoption. The initiative includes strategic partnerships with Web3 companies such as Astar Network, Circle, and Optimism. Sony aims to create a fan community centered on creators and connect diverse values through Soneium, with the ultimate goal of integrating Web3 services into people's daily lives. While the company acknowledges the challenges faced by Web3, including limited user adoption and the need for mainstream use cases, it remains committed to decentralizing the concentrated power of the current internet landscape.

    In completely unrelated and more digestible news Sensible Weather, a leading weather protection provider that we’ve featured many times, has partnered with Kampgrounds of America (KOA) to offer Weather Guarantees at over 450 KOA Campgrounds across the United States. This collaboration allows campers to purchase weather protection for their outdoor experiences, providing peace of mind and potential reimbursements of up to 100% of their nightly rate if weather conditions exceed predefined parameters. The partnership comes at an opportune time, as camping has seen a significant increase in popularity, with active campers growing by 68% over the past decade. If you are looking to do some camping this fall make sure you look into Sensible Weather protections to ensure that unpredictable weather won't dampen (nailed it) your camping experience.


    🤝 Venture Deals

    LA Companies

    • Space and Time, a blockchain data warehouse developer, raised a $20M Series A led by Framework Ventures. - learn more
    • Miris, a provider of spatial content streaming solutions, raised a $26M Seed Round led by IAG Capital Partners. - learn more

    LA Venture Funds

    • Fika Ventures led a $4.55M Seed Round for Revenew, a San Francisco startup that aims to help digital platforms and marketplaces manage their payments and optimize financial operations. - learn more
    • Bonfire Ventures participated in a $25M Series A for Supio, an AI platform for personal injury law firms. - learn more
    • Amplify LA participated in a $2M Seed Round for Pryzm, a startup that provides tools and data to help businesses navigate government contracting more efficiently. - learn more

      ✨ Featured Event ✨

      LA TECH CEO SUMMIT

      LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

      Learn More Here

      Register Here


      Download the dot.LA App

      Personality Assessments Improving Workplace Dynamics

      Misunderstandings can have significant and sometimes severe impacts, far beyond the hilarious cake pictured above. Many organizations are increasingly using personality assessments to improve team dynamics and productivity. Tests like the Enneagram, Myers-Briggs Type Indicator (MBTI), and DISC assessment are valuable tools for developing existing teams in addition to hiring new employees. These assessments provide insights into team members' motivations, communication styles, and work preferences, helping colleagues understand each other better. By highlighting the different personalities within a team, these tests can enhance communication, resolve conflicts, and optimize task assignments based on individual strengths. As companies aim for greater efficiency and collaboration, the Enneagram, MBTI, and DISC assessments are becoming essential for transforming established teams into more effective and cohesive units.


      Image Source: iEQ9

      Enneagram

      The Enneagram test is a sophisticated personality assessment that categorizes individuals into nine distinct personality types, each defined by unique motivations, fears,and behavioral patterns. This holistic approach enhances team dynamics in a business setting by fostering self-awareness, improving communication, and facilitating conflict resolution among team members. By understanding different personality types, teams can optimize their composition, tailor professional development, and create a more empathetic and collaborative environment. This framework not only helps leaders adapt their styles to better support diverse team members but also promotes inclusivity and effective collaboration, ultimately leading to improved team performance, productivity, and retention.

      Resources:iEQ9. We recommend getting an Enneagram coach to get the most out of the results.

      Key Features: Focus on core motivations. Accounts for personality shifts under stress or growth. Offers practical, actionable guidance for personal growth. Uses a dynamic, adaptive questioning approach. Claims 95% accuracy rate through advanced techniques.


      Image Source: DiSC Profile

      DiSC (Dominance, Influence, Steadiness, and Conscientiousness)

      The DiSC assessment is a widely used behavioral analysis tool that categorizes individuals into four primary personality types: Dominance, Influence, Steadiness, and Conscientiousness. For businesses, DiSC provides valuable insights into employees' communication styles, work preferences, and motivations. By understanding these behavioral tendencies, teams can improve collaboration, reduce conflicts, and enhance overall productivity. Implementing DiSC in a business setting can lead to more effective leadership, tailored communication strategies, and optimized task allocation based on individual strengths.

      Resources:DiSC Profile.

      Key Features: Designed specifically for workplace applications. Focuses on observable behaviors rather than psychological traits. Widely researched and validated over 40+ years. Provides practical strategies for improving interactions.


      Image Source: The Myers-Briggs Company

      The Myers-Briggs Type Indicator (MBTI)

      The Myers-Briggs Type Indicator (MBTI) is a widely used personality assessment tool that categorizes individuals into 16 distinct personality types based on four dichotomies: Extraversion/Introversion, Sensing/Intuition, Thinking/Feeling, and Judging/Perceiving. For businesses, the MBTI provides valuable insights into employees' communication styles, decision-making processes, and work preferences.This helps promote a more productive workplace, and enables employees to become involved in more meaningful ways, all while leveraging everyone’s unique strengths.

      Resources:The Myers-Briggs Company.

      Key Features: Focuses on preferences rather than traits. Focuses on how people perceive and judge information. Widely used in business and career counseling


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