Activision Blizzard misconduct allegations allegedly led to Microsoft acquisition

The deal was months in the making

Microsoft‘s acquisition of Activision Blizzard apparently came about due to the misconduct allegations against the latter.

A new report from Bloomberg has detailed some of the behind the scenes actions that are said to have taken place regarding the Activision Blizzard acquisition. According to the report, when the news broke of misconduct allegations at Activision Blizzard from The Wall Street Journal, Microsoft Corp. senior executives suggested Xbox head Phil Spencer should go into talks with Activision CEO Bobby Kotick.

Spencer and Microsoft had two goals. The first was apparently to offer support to Activision Blizzard, and to make it clear that Microsoft was concerned about the allegations against the company. At the time of the allegations, now former Blizzard president J. Allen Brack sent an email to staff addressing the situation, saying “The allegations and the hurt of current and former employees are extremely troubling…”

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While I can’t comment on the specifics of the case as it’s an open investigation, what I can say is that the behaviour detailed in the allegations is completely unacceptable.”

Activision Blizzard executive Fran Townsend responded differently, denying the allegations in an email to staff saying “A recently filed lawsuit presented a distorted and untrue picture of our company, including factually incorrect, old, and out of context stories – some from more than a decade ago.”

Microsoft’s second supposed goal was to guarantee that they would be in a position to acquire Activision Blizzard, should the company be interested in selling.

Bobby Kotick, President and CEO, Activision Blizzard in 2014 CREDIT: Javier Rojas

The month following The WSJ report, Activision Blizzard stock dropped by about 15%, but Kotick and the board weren’t immediately sold on being acquired by Microsoft, according to sources that spoke with Bloomberg. Activision apparently looked for other interested parties, including Facebook parent company Meta, and at least one other large company.

Microsoft apparently backed off when it became clear Activision weren’t entirely convinced, but obviously conversations continued at a later date. A majority of the merger talks took place between Spencer and Kotick, though Microsoft CEO Satya Nadella was involved where necessary.

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Nadella had apparently been looking for a large-scale acquisition since the summer of 2020 that would provide Microsoft with an established group of consumers. With Activision Blizzard also owning mobile developer King, the acquisition became a perfect fit for Microsoft.

Microsoft’s acquisition of Activision was announced January 18, the latest story that puts Activision Blizzard in the spotlight. It’s currently unclear if Kotick is staying on as CEO, and he has declined to comment on the matter.

In other news, the first season of Splitgate is launching next week, and it’s adding a range of new content, including a custom level creator, and two new game modes.

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