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Without warning, Microsoft announced the acquisition of legendary game developer Activision Blizzard for $68.7 billion. The operator of the transaction is PhilSpencer, the head of Microsoft XBox. Two large game developers acquired by Microsoft, Mojang, the owner of My World, and ZeniMax, Bethesda's parent company, are both led by Spencer.
Many media quoted Microsoft CEO Nadella's comments and linked the acquisition with Microsoft's layout in the meta-universe-but it is difficult to explain why Microsoft suddenly rose to acquire this partner with nearly 20 years of cooperation history, especially considering that Activision Blizzard has not made any action in the MR field so far.
On the second day of Microsoft's official announcement, Bloomberg interpreted the background of the acquisition from another angle-the sexual harassment scandal that Cotic, CEO of Activision Blizzard, was caught in last year, and the retreat of other potential acquirers, which was the B side of Microsoft's acquisition of Blizzard.
The following content comes from Bloomberg, with the original title of "FalloutPropped Microsoft TopursueDeal", written by DinaBass and LianaBaker, organized by Geek Park.
At the end of last year, the incident of BobbyKotick, employee and CEO of Activision Blizzard, was exposed, and Kotick was accused of knowing the sexual harassment of the company for many years. At that time, some Microsoft executives suggested that PhilSpencer, the head of Xbox, contact the troubled Kotick.
According to people familiar with the matter, the purpose of this move is to provide support to this key partner and make it clear that Microsoft is worried about the way Activision Blizzard treats women. Another goal is to ensure that if Cotic and the board of directors are willing to sell the company, Microsoft will be able to make an offer. After several phone calls in two weeks, the discussion began. Microsoft is interested in acquisition.
As a result, Microsoft announced on Tuesday that it would acquire Activision Blizzard for $68.7 billion, including the legendary game publisher who once created super IP such as Call of Duty series and World of Warcraft. This combination makes Microsoft jump into the ranks of top game developers, providing the company with mobile users that it has been avoiding for years, and increasing its strength when Microsoft competes with its competitors to build a so-called virtual reality platform.
BobbyKotick Photography: PatrickT.Fallon/Bloomberg
Although the event that paved the way for the final agreement occurred in mid-June at 5438+065438+ 10, Microsoft executives have been hinting that they have been looking for trading opportunities for a long time. At least since the summer of 2020, Satya Nadella, CEO of Microsoft, has been looking for acquisitions that can bring stable C-end users to the software manufacturer.
20211/In an interview at the International Council Summit in Paley Center, Spencer reiterated his often stated position that he was seeking an acquisition, and pointed out that Xbox especially wanted to increase the transaction of leisure and social games-Activision Blizzard's mobile games could make up for this. Spencer said at the summit.
At about the same time in May 438+065438+1October, a report of the Wall Street Journal described in detail the rape allegations involved in a studio owned by Activision Blizzard, and said that Cotic had been informed of the suspected incident, which occurred between 20 16 and 20 17, and finally reached an out-of-court settlement, but it was not reported to the board of directors. This report quoted interviews, company emails, regulatory requirements and other internal documents, thus confirming that Cotic, as the CEO of Activision Blizzard, was aware of the misconduct of employees in various departments of the company. The article also points out that Cotic is also involved in the settlement agreement of abuse cases.
After the explosive report was released, Spencer posted an email inside Microsoft, calling himself, and broke the news according to these.
The two companies have cooperated for nearly 20 years. The first generation of Activision's classic IP Call of Duty series was sold on Microsoft's first generation Xbox game console. In an email sent to employees seen by Bloomberg, Spencer said that he and Microsoft's game leadership team.
Other partners said they were evaluating their relationship with Activision, and some investors and employees called on Cotic to step down. In an interview with Bloomberg on Tuesday, Cotic said that the deal had nothing to do with the pressure around Activision Blizzard and the pressure when he was CEO.
Phil Spencer Photography: PatrickT.Fallon/Bloomberg
Behind the scenes, Spencer is working on a merger method. Like the previous transactions of large game developers, Microsoft has largely utilized Spencer's decades of industry experience. 1988, the executive joined Microsoft as an intern. Previously, he sold video games and PC devices in a computer market in Vancouver, Washington.
Despite Activision Blizzard's efforts to restore its reputation among players and investors, the company's share price fell by about 65,438+05% within one month after The Wall Street Journal published this article. Two people familiar with the matter said that after weighing the potential acquirers, Cotic and the board of directors did not initially determine Microsoft as the company's sales target.
People familiar with the matter who asked not to be named said that Activision Blizzard called to try to find other interested investors, including Facebook's parent company Meta and at least one other big company. But other potential buyers lack interest. In an interview, Spencer refused to discuss how the transaction was conducted. A spokesperson for Meta declined to comment, and representatives of Activision Blizzard did not respond to requests for comment.
Due to the hesitation of Activision Blizzard, Microsoft once retreated.
They told Activision Blizzard that they were happy to continue to be partners and were committed to selling more Activision Blizzard games on Xbox. In the end, Activision Blizzard returned to the negotiating table, and the teams of both companies worked during the holidays and completed the transaction. Microsoft hired DanDees of Goldman Sachs as a consultant, and Activision Blizzard hired NancyPeretsman of Allen Co The person familiar with the matter said that although Nadella was involved when necessary, most merger negotiations were held between Spencer and Cotic.
Both companies kept the negotiation process highly confidential, although Spencer was asked about the relationship between Microsoft and Activision Blizzard in a podcast published by new york Times on June 65438+ 10/0.
Spencer told the interviewer.
He also avoided criticizing Cotic directly. Spencer said.
Nadella's first acquisition as CEO was the acquisition of My World for $2.5 billion in 20 14, which was also attributed to Spencer's personal relationship with game creator MarkusPersson, who was called Notch by gamers. When persson wanted to sell My World, he went straight to Spencer. My World used to be his private property and was considered as one of the best-selling games of all time.
Spencer also participated in Microsoft's acquisition of ZeniMax, the owner of BethesdaSoftworks, a famous video game publisher, for $7.5 billion in 2020, and led the negotiations with Roberta. Company co-founder Altman.
When Microsoft discussed the deal with Activision, another big video game company also acquired another mobile game developer. Last week, Take-Two announced the acquisition of Zynga, a mobile game manufacturer. It is 1 1 billion dollars. According to people familiar with the matter, before Take-Two reached a deal, the bankers involved in the deal contacted Microsoft to see if they were interested in buying Zynga, but Microsoft refused.
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