At this point, to say Microsoft has shaken up the video game industry is a complete understatement. Just over a year after the company’s massive acquisition of Zenimax for $7.5 billion. In a deal that brought studios such as id Software, Bethesda, Arkane, and more into the Xbox Game Studios team. Now, this week they have purchased massive third-party publisher Activision Blizzard for an estimated $68.7 billion. Making this the biggest single acquisition that we have ever seen in the gaming industry.
While this acquisition is undoubtedly a big deal, there are plenty of challenges that the leadership of Microsoft and Xbox will have to navigate in the coming years. From employee working conditions, toxic existing management, the overall direction of the business as well of course keeping fans of Activision Blizzard’s games happy. This will possibly be one of the most challenging acquisitions done by any of the big three in gaming and has many opportunities for failure.
Working Conditions and Employee Unrest
Activision Blizzard was making the headlines for all the wrong reasons in 2021. Many were shocked when initial reports broke about the sexual harassment and toxic workplace environment at Activision. Unfortunately, toxic workplace culture has been a plague in the video game industry for a very long time. Yet, the Activision Blizzard reports hit all new heights of disgusting behavior. This disturbing behavior was not only perpetrated by employees but also by leadership as well. Many reports and victims stepped forward and talked about the many problems facing Activision Blizzard’s workforce. However, the company’s leadership has been dragging its heels on actually making constructive changes.
When the Activision Blizzard deal closes in 2023, Microsoft needs to make sure that CEO Bobby Kotick is shown the door. While many people have vocalized how badly they want to see Kotick burn for his contributions to the state of the publisher. The sad reality is that Kotick will likely be paid a large sum of money to exit the company. He will likely fade off into the sunset on a yacht. But, Microsoft cannot claim to be serious about changing and improving the working conditions of Activision Blizzard with Kotick still in a position of power. Otherwise, all of this was simply lip service to keep fans and pundits at bay.
The removal of Kotick is only a small step in the right direction. There is plenty of more work to be done in regards to the quality of work-life at Activision Blizzard. The continued ousting of abusers is an absolute must. There is no justice for these victims until all of the abusers have been removed from the company. This requires communication between Microsoft and the different teams at Activision Blizzard. The experts of the challenges and problems that these teams face are the employees themselves. Sitting down and opening a clear line of communication will be essential for moving forward.
Creating a pro-active and healthy work environment is paramount to the success of this deal. Activision Blizzard has struggled to keep talented people due to its terrible working conditions. If you want to bring in the best talent you have to treat them accordingly. This includes making them feel safe, that their ideas are valuable, and paying them wages that are competitive within the industry. This is a tall list to fill, but it is absolutely essential that Microsoft gets this right. Or else this whole deal will fall apart as Activision Blizzard is already on a crash course for disaster.
The Current Direction Of Activision Blizzard
Creative stagnation is a massive problem at Activision Blizzard right now. It is not due to a lack of talented developers. The company has always relied heavily on Call of Duty in order to make its big money year after year. In a world where you need to see a large amount of growth year over year, that type of thinking doesn’t lend itself to exploring new ideas. Over the past few years, Activision Blizzard has gotten quite cozy on just producing Call of Duty. In addition to updating a few staple franchises with new content such as World Of Warcraft, Hearthstone, and more. However, when Call of Duty: Warzone the F2P Battle Royale that launched alongside Call Of Duty Modern Warfare (2019), began to trend massively upwards, the company saw an opportunity. This opportunity was to essentially double its money year over year. Updating Warzone to match the most recent paid version of Call Of Duty allowed an almost seamless blend of premium content as well as a gold mine of microtransactions. Unfortunately, it very quickly began to have a negative effect on Activision Blizzard’s other studios.
Development issues began kicking off with Call of Duty: Cold War and then snowballed with Call Of Duty: Vanguard. Activision Blizzard quickly found itself on its heels trying to make sure that the full-priced version of Call Of Duty launched on its regular yearly basis. All while still trying to update Warzone and keep the player base active and interested enough to continue to spend money. This saw them pull studios like Toys For Bob who had previously worked on titles such as Crash Bandicoot N’Sane Trilogy, and Spyro Reignited Trilogy assisting in the development of Call Of Duty. While Vicarious Visions the studio behind the incredible Tony Hawk remasters, was disassembled and rolled into Activision Blizzard to help on a variety of projects.
It is clear that Activision Blizzard was all in on Call Of Duty and all it would take for the company to have a massive stumble is a failed launch. This is something that Microsoft leadership will have to try and figure out. Maybe reevaluate Call Of Duty being a yearly release, and release a new installment every 2 years so that the studios have more time to breathe. This could allow studios like Raven and Toys For Bob the freedom to work on new projects or perhaps return to classic IP that fans will love. Expanding to new projects, and thinking outside of just Call Of Duty will be a major shift for the publisher.
The State Of IP Under Activision Blizzard
While Activision Blizzard is undoubtedly all in on Call Of Duty, this isn’t the only problem they face in the IP department. Overwatch, which for the longest time was one of the biggest FPS shooters in the PC and console space, appears to be in a truly bizarre state. After great post-launch support, Blizzard discontinued adding new characters for Overwatch. The developer cited that the team was focused on delivering Overwatch 2. Now fast forward to 2022 where the only update we have seen is that Overwatch 2 will likely not release until sometime in 2023. As a fan of Overwatch, it has been depressing to see the game slowly slide down in quality. And with hyper-competitive shooters like Valorant jockeying for position, it is even sadder. It feels like Overwatch is nothing more than an afterthought at the moment. It will likely take a lot for Activision Blizzard to prove that Overwatch 2 is the answer fans are asking for.
Diablo IV was also pushed back to 2023, but the removal of the game’s director after allegations were raised against him. This undoubtedly led to the restructuring of the leadership of Diablo IV similar to the struggles Dying Light 2 faced with the removal of Chris Avellone. While it has been close to a decade since a new Diablo was released, for the time being, it appears that the game is heading in the right direction. It could possibly be a big success for Activision Blizzard in 2023. But there is no such thing as a guarantee and we have heard almost nothing about Diablo IV in a long time now.
World Of Warcraft has been struggling to compete in the MMO market. The once king of the MMO genre has been stumbling. A combination of not releasing content and updates in a timely fashion, and fierce competition have fueled this downturn. World Of Warcraft has been struggling to release patches and content over the past few years. This undoubtedly was fueled by the toxic work environment as well as the challenges of the COVID-19 pandemic. The game has also seen fierce competition from Square Enix’s Final Fantasy XIV which has become an absolute juggernaut in the past few years. The road ahead for World Of Warcraft is hard but could be solved by improving the work conditions of the teams. It could help get the game back on track in terms of the release schedule. Then, once patches and content are back on track, the team can focus on what the next big step for World Of Warcraft is.
Tapping Into History
There is a wealth of untapped IP sitting dormant in the back catalog of Activision Blizzard. With Xbox’s clear lack of more kid-friendly content, green lighting an all-new Spyro game feels like a great first step. Don’t stop there, however, with classic 90’s IPs such as Heretic, or Tenchu why not revive them or at the very least make them available on the Xbox platform? As someone who grew up playing Starcraft, I could only hope that maybe, just maybe we see a Starcraft III in my lifetime. Give Sledgehammer a break from Call of Duty and maybe let them explore a new IP. Or perhaps revive something like GUN or even Wolfenstein: Enemy Territory.
There is also a wealth of untapped IP that Xbox has at its disposal. Just think about the talented studios working under Activision Blizzard that could do amazing things with these dormant IPs. Could you imagine a Banjo Kazooie remake from Toys From Bob who has done a great job adapting Crash Bandicoot and Spyro to modern consoles? The point I am trying to make here is that there is a ton of potential within this deal. Are these easy IPs to revive? Absolutely not, but if we have learned nothing from Wolfenstein, Doom, Resident Evil, and many more sometimes changing things up and bringing something fresh to an old IP can truly lead to something magical.
A Long Road Ahead For Microsoft and Activision Blizzard
Many of the challenges that Microsoft has ahead with Activision Blizzard are not easily solved. Changing the direction of the company will take time, care, and a lot more money. The most important aspect is making developers feel safe and that their voices matter again. If Microsoft wants to bring the soul back to Activision Blizzard there is a lot to be done. The Redmond-based company will want a more stable and viable investment out of Activision Blizzard. In the coming years, they need to put the work in that will return the massive publisher to being the juggernaut that it was in the early 2000s. Only time will tell how this acquisition will turn out. But it is undoubtedly the riskiest acquisition that Microsoft has committed to in the company’s history. I only hope they are in it for the long haul.