It’s the End of a Tumultuous Era for Activision—And the Start of a New Day in LA for Microsoft

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

It’s the End of a Tumultuous Era for Activision—And the Start of a New Day in LA for Microsoft
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It is a momentous, defining day for Southern California’s tech industry.

After a tumultuous year, Activision Blizzard—the most prominent video game developer and publisher in the region, and one of the largest globally—is selling itself to Microsoft, one of the world’s true tech giants, in a deal that promises to reshape the region’s tech landscape and that of the gaming industry at large.


Activision has recently weathered a storm of workplace misconduct allegations, the departure of high-ranking executives and pressure from workers who want to unionize amid contentious layoffs. Yet Seattle behemoth Microsoft has shown no qualms about inheriting these issues and making a long-awaited foray into Los Angeles, after it announced Tuesday that it will pay roughly $69 billion to buy Activision in what is the gaming industry’s largest-ever acquisition.

The deal is a major coup for shareholders of the beleaguered, Santa Monica-based “Call of Duty” publisher, who have been advocating for changes at the company for several years now. Those include the exit of CEO Bobby Kotick, who has led Activision since 1991 and is one of the highest-paid executives in the gaming world. Kotick has faced mounting pressure since it emerged that he was aware of sexual harassment and assault complaints at the company yet failed to report it to Activision’s board, prompting an outcry among shareholders and employees alike.

As of now, it remains uncertain what the Microsoft takeover will mean for Kotick. While the Wall Street Journal reported that he is expected to depart the company after the deal closes, Microsoft CEO Satya Nadella sang Kotick’s praises in a conference call Tuesday—lauding “his leadership and commitment to real culture change.” (Kotick also talked up his “great relationship” with Xbox boss Phill Spencer in an interview with VentureBeat.) Should he depart, Kotick stands to make a pretty penny; the Microsoft acquisition could net him up to $293 million, according to Activision’s 2021 annual report, and potentially hundreds of millions more through his nearly 4 million shares in the company.

For Microsoft, the deal is by far its largest acquisition to date—nearly three times as large as its $26 billion purchase of LinkedIn in 2017—and cements the tech giant’s presence in Silicon Beach. Besides operating a Microsoft Studios office in Santa Monica and slapping its name on the Microsoft Theater in Downtown L.A., the company had yet to pursue a serious expansion in Southern California.

Now, Microsoft stands to inherit Activision’s multiple locations throughout L.A.—its main publishing headquarters in Santa Monica, its development studio in Beverly Hills, its quality-testing site in El Segundo. It will also own Activision’s state-of-the-art motion-capture filming studio in Los Angeles. By merging forces with Xbox, the acquisition is expected to create the world’s third-largest gaming company by revenue behind China’s Tencent Holdings and Japan’s Sony.

Sony looms large over the deal, which would mark a big step for Microsoft toward challenging its Japanese rival’s dominance in the gaming industry. The Xbox and PlayStation consoles have dueled over market share for decades—but once the Activision deal is solidified, Microsoft will essentially own esports. Activision runs the lucrative “Call of Duty” franchise and its corresponding professional COD League, as well as the “Overwatch” game and esports league. Sony, on the other hand, has yet to turn any of its standout titles into a major esports franchise.

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Microsoft will look to add these and other Activision titles, which have a combined 400 million active monthly users, to its Xbox Game Pass subscription, which has 25 million subscribers. In addition to Game Pass, Microsoft is targeting an expansion into cloud gaming—which allows games to be streamed on phones, laptops and tablets—and will likely leverage Activision’s strong mobile gaming business, which offers hit titles like “Call of Duty Mobile” and “Candy Crush.”

There are other ramifications to consider. Activision employees who were working to drum up support for a labor union would effectively need to restart that effort under the new ownership. It remains to be seen if Spencer will institute sweeping reforms at Activision once it becomes a subsidiary of Microsoft, as the Xbox Game Studios CEO steered clear of making any specific promises in a statement Tuesday.

Instead, Spencer offered that Microsoft “deeply value[s] individual studio cultures,” and nodded to Activision’s workplace culture issues by noting: “We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect… We’re looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard.”

The deal, however, is far from sealed; there is the potential of antitrust scrutiny and other legal hurdles that may await before the agreement is allowed to proceed. As rivals like Sony and Nintendo do with certain popular titles, some Microsoft games are console-exclusive, meaning you can’t play them on anything other than an Xbox system. If Microsoft attempts this with Activision titles that are popular on PlayStation consoles, like the “Call of Duty” series, it could raise a regulatory red flag.

In the meantime, Activision shareholders surely welcomed the news with open arms. Activision shares rallied more than 25% on Tuesday, to north of $82 a pop. (Microsoft shareholders seemed less convinced, with the company’s stock down more than 2% on the day.)

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Smart Shoes for Kids? Skechers Thinks So 👟

🔦 Spotlight

Happy Friday, LA!

This week, Skechers may have just kicked off a new trend that’s bound to have parents and tech lovers talking. They've unveiled the "Find My Skechers" line, kids’ sneakers that come with a hidden compartment to securely hold an Apple AirTag. For $52 to $58, parents can now track their child’s shoes in real-time using the Find My app, giving a whole new meaning to "keeping an eye on things." While these tech-savvy kicks are already gaining attention, will they become the new norm in kids' footwear? And who’s next? Will Nike or Adidas be jumping on the AirTag bandwagon, or is Skechers setting the stage for a whole new wave of tech-integrated fashion?

But it’s not all smooth sailing. This innovation raises some interesting questions about privacy and surveillance. Are we crossing a line when we start tracking our kids’ every move through their shoes? While Apple’s anti-stalking features are in place to prevent misuse, it will be intriguing to see how other brands and parents respond to this new blend of fashion and tech.

What do you think? Could this become a must-have feature in the next generation of kids' gear, or is it a step too far? Let us know your thoughts!

🤝 Venture Deals

LA Companies

  • LakeFS, a provider of Git-like version control for data lakes, has secured $20M in a growth funding round led by Maor Investments. The funds will support the company's expansion efforts and product development aimed at enhancing data engineering and AI initiatives within enterprise and public sector environments. - learn more

LA Venture Funds

    • Sound Ventures co-led the $16.1M Series A funding round for Knit, an AI-powered consumer research platform. The funds will be used to accelerate product development, enhance AI capabilities, and expand global research operations. This investment underscores the growing trend of combining AI with human expertise to deliver faster, cost-effective, and high-quality insights for enterprise research. - learn more
    • Anthos Capital co-led a $60M Series A funding round for Good Job Games, a mobile game developer known for creating casual and hyper-casual games. The investment, co-led by Menlo Ventures, will support the company's growth, enabling the expansion of its game portfolio and enhancing user engagement through innovative gameplay features. This funding marks a significant step in scaling Good Job Games’ operations and solidifying its position in the competitive mobile gaming market. - learn more
    • Pinegrove Capital Partners participated in Ramp's $500M Series E-2 funding round, which values the company at $22.5 billion. The funds will be used to accelerate Ramp's AI-driven financial tools, aiming to enhance automation and efficiency in corporate finance operations. - learn more
    • Riot Ventures participated in Oxide Computer Company's $100M Series B funding round, led by the U.S. Innovative Technology Fund (USIT). This investment will enable Oxide to scale its manufacturing capabilities, enhance customer support, and accelerate product delivery to meet the growing demand for on-premises cloud computing solutions. - learn more
    • Rebel Fund participated in a $3.2M seed funding round for Caseflood.ai, a San Francisco-based legal tech startup offering AI-powered client intake solutions for law firms. The funds will support the development of Caseflood's advanced voice agent, Luna, which autonomously handles client interactions, including consultations and retainer signings, aiming to enhance conversion rates and operational efficiency for law firms. - learn more
    • Smash Capital participated in Ambience Healthcare's $243M Series C funding round, co-led by Oak HC/FT and Andreessen Horowitz (a16z). The investment will support Ambience's expansion of its ambient AI platform, which automates clinical documentation, coding, and workflow tasks across over 200 specialties. The platform integrates directly with electronic health records, enhancing efficiency and compliance in healthcare settings. - learn more
    • ARTBIO, a clinical-stage radiopharmaceutical company developing alpha radioligand therapies for cancer treatment, has secured $132M in a Series B funding round. The round was co-led by Sofinnova Investments and B Capital, with participation from Alexandria Venture Investments and other investors. The funds will support the advancement of ARTBIO's lead program, AB001, through Phase II clinical trials, and facilitate the expansion of its manufacturing and supply chain infrastructure. - learn more
    • Rebel Fund participated in OffDeal's $12M Series A funding round, led by Radical Ventures, to support the company's mission of building the world's first AI-native investment bank. OffDeal aims to democratize access to high-quality M&A advisory services for small and mid-sized businesses by automating analyst tasks with AI, enabling efficient sell-side transactions. The funds will help scale OffDeal's technology-driven, advisor-led approach to facilitate successful exits for entrepreneurs. - learn more
    • Sandbox Studios participated in a $3M seed funding round for Sarelly Sarelly, a Mexican cosmetics brand, with backing from U.S. investors like Wollef, Morgan Creek Capital Management, and Hyve Ventures. The funds will support Sarelly Sarelly's expansion into the U.S. market, including retail launches at Ulta Beauty and growth on digital platforms like TikTok Shop. - learn more

    LA Exits
    • NEOGOV, an El Segundo-based provider of HR and compliance software for U.S. public sector agencies, has been acquired by EQT and CPP Investments in a deal valued at over $3 billion. The acquisition will help NEOGOV expand its product offerings and grow its presence across North America. - learn more

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          From Retro Cool to AI Convenience: LA’s New Tech Normal

          🔦 Spotlight

          Hello LA,

          What do you get when you cross a 1950s diner, robot-powered retail, and apps trying to do the right thing? A very Hollywood week in LA tech.

            Image Source: Tesla

           

          Let’s start with the most literal: Tesla’s long-awaited retro-futuristic diner just opened on Sunset, complete with drive-in movie screens, EV charging bays, and a neon glow that practically begs to be Instagrammed. It’s a mashup of Elon-style nostalgia and innovation, where your burger might take longer to arrive than your Model 3 finishes charging. While the menu sticks to diner classics (yes, there's a milkshake bar), the real flex is how Tesla is rebranding waiting as an “experience.” In a city where parking is currency, Tesla has turned it into a destination.

            Image Source: VenHub

           

          Just down the street, VenHub’s smart convenience store quietly opened its doors, but this is no 7-Eleven. The Pasadena-based startup is betting on AI-powered, cashier-free retail hubs that can be dropped anywhere, anytime. Think vending machine meets Apple Store. Investors are buying in on the promise of 24/7 access to snacks, essentials, and even meds. No human required. In a city of hustle, VenHub wants to make “convenient” even more convenient. Check out their locations here.

          Uber also rolled out new "Women Rider Preferences" in LA, letting women and nonbinary drivers opt to pick up women riders. It's a long-requested feature aimed at improving safety and comfort, especially for those driving at night. And while it’s opt-in for now, it’s a significant move toward rethinking trust and transparency in ride-hailing, starting with the people behind the wheel.

            Image Source: Snap

           

          And finally, Snap launched "Home Safe Alerts" to quietly keep you safer on the move. You can now send automatic updates to trusted friends when you're heading out or getting home. It’s a subtle yet powerful shift toward making tech feel more protective and less performative. Snap’s way of saying, "Text me when you get home," but without the follow-up guilt.

          So whether you're grabbing a burger under the glow of a Tesla screen, scanning a QR code at a robot-run bodega, or just getting home a little safer, this week reminded us that LA doesn’t just build the future. It makes it weird, wonderful, and just a little more user-friendly.

          Catch you next week ✌️

          🤝 Venture Deals

          LA Companies

          • Nevoya has raised $9.3M in seed funding, led by Lowercarbon Capital, to transform the American trucking industry with its advanced freight platform. The company aims to modernize logistics by optimizing routes, improving efficiency, and better connecting shippers and carriers. The funding will help Nevoya expand its technology and scale operations to redefine how goods move across the country. - learn more

          LA Venture Funds

          • Pinegrove Capital Partners joined Armada’s $131M Series B round to support the San Francisco-based edge computing startup in its mission to bring secure, modular data centers to remote and infrastructure-poor environments. Armada builds rugged, containerized units like its flagship Galleon and newly unveiled Leviathan, designed to enable real-time AI and compute at the edge. The funding will accelerate the deployment of these solutions globally and scale development for critical defense, energy, and industrial use cases. - learn more
          • Rebel Fund joined Lyra’s $6M seed round, supporting the San Francisco startup that’s redefining video conferencing with its AI-native platform. Lyra transforms traditional meetings into interactive workspaces with real-time collaboration and auto-generated summary notes. The capital will bolster infrastructure and support rapid growth as the company scales its go-to-market operations. - learn more
          • Plassa Capital participated in Bloom’s $1.6M pre-seed round to support the startup’s mission of building an all-in-one hub for the crypto trading community. Based in Miami, Bloom offers a social platform that combines trading tools, real-time news, and community-driven insights for crypto traders. The funding will help the company grow its team, enhance its product, and expand its user base. - learn more
          • Embark Ventures participated in TRIC Robotics’ seed funding round to support its development of autonomous robots that help farmers manage pests and plant diseases without chemicals. Based in Delaware, TRIC uses ultraviolet light and computer vision to treat crops like strawberries in a sustainable, labor-efficient way. The funding will help the company expand deployments, grow its team, and scale its technology to more farms across the U.S. - learn more
          • Alexandria Venture Investments participated in Dispatch Bio’s $11.2M seed funding round. Based in San Diego, Dispatch Bio is developing a novel immunotherapy platform that aims to deliver a universal treatment for solid tumors by reprogramming immune cells at the tumor site. The funds will support further development of its platform and expansion of preclinical studies. - learn more
          • Mucker Capital led Vaudit’s $7.3M seed round, reinforcing its belief in the San Francisco Bay Area-based startup. Vaudit delivers an AI-powered media audit platform that automates real-time validation of ad spend, detecting discrepancies before payments are processed. The funding will enable Vaudit to enhance its platform, expand its team, and scale its global reach across web and mobile channels. - learn more
          • Morpheus Ventures participated in xLight’s $40M Series B funding round to support its mission of transforming semiconductor manufacturing. The Palo Alto-based company develops advanced laser-based lithography technology designed to make chip production faster, more precise, and more cost-effective. The new funding will be used to accelerate product development, expand the team, and scale operations to meet growing demand. - learn more
          • Magnify Ventures participated in Alix’s $20M Series A funding round to help the company modernize the estate settlement process. Based in New York, Alix offers a digital platform that simplifies and streamlines estate administration for families and professionals. The funds will be used to enhance the platform, grow the team, and expand its reach to meet increasing demand. - learn more
          • Untapped Ventures participated in Nexxa AI’s $4.4M seed round to support the company’s mission of bringing specialized AI solutions to heavy industries like manufacturing, logistics, and energy. Based in Sunnyvale, Nexxa’s platform enables domain-specific AI deployment tailored to industrial operations. The funding will help the company expand its engineering team, accelerate product development, and onboard new enterprise customers. - learn more

          LA Exits
          • Exverus Media, a Los Angeles-based media agency known for its data-driven approach to brand growth, has been acquired by global marketing firm Brainlabs. The acquisition strengthens Brainlabs’ U.S. presence and adds strategic media planning and measurement capabilities to its portfolio. Exverus will continue operating under its brand while gaining access to Brainlabs’ global resources and infrastructure. - learn more
          • Generous Brands is set to acquire Health-Ade Kombucha, the Los Angeles-based beverage company known for its premium, gut-healthy drinks. The deal marks Generous Brands’ push into the fast-growing functional beverage market and adds a high-profile name to its portfolio. Health-Ade will continue operating with its existing team while benefiting from expanded resources and distribution capabilities. - learn more
          • Launch Potato has acquired OnlyInYourState, a travel discovery platform known for spotlighting hidden gems across the U.S. The acquisition expands Launch Potato’s portfolio of digital brands and supports its goal of using AI to personalize trip planning experiences. OnlyInYourState will continue to operate while integrating with Launch Potato’s performance marketing and content strategy capabilities. -learn more
          • Vilore Foods has acquired Tia Lupita Foods, a better-for-you Mexican food brand known for its hot sauces, chips, and tortillas made with simple, sustainable ingredients. The acquisition expands Vilore’s portfolio into the health-conscious and culturally authentic food space. Tia Lupita will continue to operate under its brand while gaining access to Vilore’s distribution network and resources. - learn more

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              The $260M Robot Revolution Happening in Torrance

              🔦 Spotlight

              Hello Los Angeles,

              Forget rockets. This week, the loudest move in the defense tech scene came from a factory floor in Torrance, where Hadrian secured $260 million to fuel its robot-run revolution.

              The company, which builds AI-powered, robot-run factories for America’s aerospace and defense industries, announced the massive Series C raise, led by existing investors like Lux Capital and Founders Fund, along with a factory expansion loan facility arranged by Morgan Stanley. The funding will power Hadrian’s third factory (in Arizona), unlock full product manufacturing, and accelerate its mission to bring American manufacturing roaring back faster, smarter, and more automated than ever.

              And here’s what makes them fascinating: Hadrian isn’t just churning out parts. They’re reinventing what a factory is. Their facilities look more like giant humming circuit boards than the smokestacks of old, packed with robots, AI, and ambition to move at the speed of software.

              It’s the kind of vision you’d expect from a founder who speaks about reshoring U.S. manufacturing as if it were a moral obligation and then backs it up with billion-dollar contracts and steel-and-silicon proof.

              We’ll be watching closely to see what Hadrian assembles next. One thing’s certain: the robots are already working overtime, and if you’re smart (or a robot whisperer), you might want to join them.

              🤝 Venture Deals

              LA Companies

              • Boulevard, a SaaS startup that helps salons and self-care businesses manage scheduling and operations, has raised an $80M Series D led by JMI Equity at a valuation near $800M. The funding will fuel enhancements to its AI-powered scheduling tools and support continued product innovation and market expansion. - learn more
              • Rwazi has raised $12M in Series A funding to expand its AI-powered decision-making platform, which helps businesses replace gut-based decisions with real-time insights and simulations based on consumer behavior. The round was led by Bonfire Ventures and will support the growth of Rwazi’s simulation engine and data infrastructure to help companies make more precise, data-driven decisions across marketing, product, and operations. - learn more
              • Lexington Bakes, an artisan bakery known for its gluten-free, organic oat bars and luxury brownies, has raised $1M in a seed round. The investment was led by Rainfall Ventures. The funding will help the company transition to co-manufacturing, expand its retail reach from about 100 to a projected 1,000 doors in the next year, and scale up its team and operations. - learn more

              LA Venture Funds

              • TCG (The Chernin Group) participated in Substack’s latest $100M funding round, joining Andreessen Horowitz, and other investors. Their investment underscores confidence in Substack’s vision to grow its subscription publishing platform and expand its tools for independent writers and creators. - learn more
              • Acre Venture Partners participated in Zucca’s $5M funding round to help the Seattle startup scale its platform, which uses AI to design and develop plant-based food products faster and more efficiently. Their investment will support Zucca’s mission to create sustainable, health-focused foods and expand its operations. - learn more
              • Sound Ventures joined XMTP’s $80M Series B to back its vision of redefining how people communicate in the web3 world. With this funding, XMTP plans to scale its decentralized, privacy-focused messaging protocol, enabling secure, wallet-to-wallet conversations across the blockchain ecosystem. - learn more
              • Morpheus Ventures and Sage Venture Partners participated in Datavations’ $17M Series A funding round, with Morpheus joining as a new investor and Sage returning as an existing backer. Datavations, an AI-driven analytics platform for the building materials and home improvement industries, uses machine learning to deliver actionable insights on pricing, inventory, assortment, and supply chains. The funds will be used to grow the team, accelerate development of its Commerce Alert Hub, and expand its presence across North America. - learn more
              • Mucker Capital led the $3.3M seed round for Bidbus, an AI-powered consumer-to-dealer used car marketplace in the U.S. The platform enables car owners to auction their vehicles online and receive competing offers from dealers, while dealers gain access to high-quality inventory more efficiently. The funding will help Bidbus enhance its AI capabilities and expand into new markets. - learn more
              • Creative Artists Agency (CAA) participated as a strategic investor in Moonvalley’s $84M funding round, signaling strong industry confidence in the company’s development of a fully licensed, AI-powered video generation platform tailored for professional filmmakers and studios. CAA’s investment reinforces Moonvalley’s commitment to ethical AI practices and provides it with a direct pipeline to top-tier creative talent and entertainment partners. - learn more
              • MANTIS Venture Capital joined Zip Security’s $13.5M Series A funding round, backing the company's mission to deliver automated, AI-driven cybersecurity and compliance solutions. Their participation supports Zip’s efforts to expand its engineering team, build deeper platform integrations, and scale into regulated industry verticals like defense, finance, and healthcare. - learn more
              • Rebel Fund participated in Apolink’s oversubscribed $4.3M seed round, joining other notable backers such as Y Combinator and 468 Capital. By investing in this 19‑year‑old–led space tech startup, Rebel Fund is supporting Apolink’s mission to deliver continuous LEO satellite connectivity and facilitate its planned demo missions and constellation build‑out. - learn more

                LA Exits
                • Retina AI is to be acquired by Onar in a deal that will enhance Onar’s AI-powered customer analytics and personalization offerings. By integrating Retina’s predictive customer lifetime value technology, Onar aims to provide businesses with deeper insights into customer behavior and more precise targeting. The acquisition highlights Onar’s commitment to delivering data-driven solutions for optimizing customer relationships. - learn more
                • Nearsure, a U.S.-based tech services company with over 600 professionals across 18 Latin American countries, has been acquired by Nortal to bolster its AI and enterprise solutions in the Americas. Known for its AI-driven transformation, custom software, and partnerships with major platforms, Nearsure will merge into Nortal’s U.S. operations and rebrand later this year. The acquisition allows Nearsure to expand into U.S. and European markets while enhancing its AI, cybersecurity, and enterprise offerings. - learn more
                • InsideOut Sports & Entertainment, the event production company behind high‑profile sports events like The Pickleball Slam, Pro Padel League, and Major League Pickleball, has been acquired by GSE Worldwide, marking GSE’s first foray into live event production. Founded by tennis legend Jim Courier and Jon Venison, who will now serve as EVP and head of the new GSE Productions division, InsideOut’s team will integrate into GSE to help scale its live-event operations into new markets. - learn more

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