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
Image from Shutterstock

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.

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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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PCH Driven: Director Jason Wise Talks Wine, Documentaries, and His New Indie Streaming Service SOMMTV

Jamie Williams
­Jamie Williams is the host of the “PCH Driven” podcast, a show about Southern California entrepreneurs, innovators and its driven leaders on their road to success. The series celebrates and reveals the wonders of the human spirit and explores the motivations behind what drives us.
Jason Wise holding wine glass
Image courtesy of Jason Wise

Jason Wise may still consider himself a little kid, but the 33-year-old filmmaker is building an IMDB page that rivals colleagues twice his age.

As the director behind SOMM, SOMM2, SOMM3, and the upcoming SOMM4, Wise has made a career producing award-winning documentary films that peer deep into the wine industry in Southern California and around the world.

On this episode of the PCH Driven podcast, he talks about life growing up in Cleveland as a horrible student, filmmaking, Los Angeles and his latest entrepreneurial endeavor: A streaming service called SOMMTV that features–what else?–documentaries about wine.

The conversation covers some serious ground, but the themes of wine and film work to anchor the discussion, and Wise dispenses bits of sage filmmaking advice.

“With a documentary you can just start filming right now,” he says. “That’s how SOMM came about. I got tossed into that world during the frustration of trying to make a different film, and I just started filming it, because no one could stop me because I was paying for it myself. That’s the thing with docs,” or “The good thing about SOMM is that you can explain it in one sentence: ‘The hardest test in the world is about wine, and you’ve never heard about it.’”

…Or at least maybe you hadn’t before he made his first film. Now with three SOMM documentaries under his belt, Wise is nearing completion of “SOMM4: Cup of Salvation,” which examines the history of wine’s relationship with religion. Wise says it’s “a wild film,” that spans multiple countries, the Vatican and even an active warzone. As he puts it, the idea is to show that “wine is about every subject,” rather than “every subject is about wine.”

For Wise, the transition to launching his own streaming service came out of his frustration with existing platforms holding too much power over the value of the content he produces.

“Do we want Netflix to tell us what our projects are worth or do we want the audience to do that?” he asks.

But unlike giants in the space, SOMMTV has adopted a gradual approach of just adding small bits of content as they develop. Without the need to license 500 or 1,000 hours of programming, Wise has been able to basically bootstrap SOMMTV and provide short form content and other more experimental offerings that typically get passed over by the Hulus and Disneys of the world.

So far, he says, the experiment is working, and now Wise is looking to raise some serious capital to keep up with the voracious appetites of his subscribers.

“Send those VCs my way,” Wise jokes.

Subscribe to PCH Driven on Apple, Stitcher, Spotify, iHeart, Google or wherever you get your podcasts.

dot.LA reporter David Shultz contributed to this report.

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