In his first interview following the news that Xbox is acquiring Activision Blizzard for close to $70 billion, current Activision CEO Bobby Kotick says the deal is necessary to compete with trillion-dollar competitors.
Speaking to VentureBeat, Kotick says that Activision Blizzard is looking increasingly outgunned in a field that now includes companies like Tencent, Netease, Amazon, Apple, Google, Facebook, Netflix, and Sony.
“It’s a reality that started to factor into our thinking. There is more competition from bigger companies with more resources,” Kotick says. “Facebook is spending [billions] a year on the metaverse. I’ve never seen as much competition, and we’re seeing it even in the wage inflation.”
Activision Blizzard makes around $8 billion a year according to analysts, which is no small figure. But as context, Microsoft is valued at over $2 trillion. Other tech giants like Netflix are trying their hands at games and Facebook renamed itself Meta and is positioning its VR platform as a key product.
According to Kotick, Microsoft’s offer of a 45% premium over the stock price was an attractive offer that got the longtime CEO to seriously consider the deal and looking at the industry as a whole cemented Kotick’s belief that partnering with Microsoft and Xbox for the future was the way to go.
“I think like, you’d think, ‘oh, ‘were this big company and have great resources.’ Kotick says. “But when you’re comparing us to, you know, $2 trillion companies and $3 trillion companies and trillion-dollar companies and 4500 billion companies, you realize, we may have been a big company in video gaming, but now, when you look at the landscape of who the competitors are, it’s a different world today than ever before.”
If Activision’s ongoing sexual harassment scandal had anything to do with the deal, Kotick only spoke of the matter to the extent it affected the company’s stock prices. And even then, Kotick says delaying the next Overwatch and Diablo had more of an impact there.
Kotick also didn’t elaborate on whether he will remain CEO after the deal between Activision and Microsoft is complete. Currently, Kotick will remain CEO and he says he will remain as long as he’s needed “However much time that takes, if it’s a month after the close, if it’s a year after that, I just care that the transition goes well.” Reports from sources say, however, that Kotick is expected to depart once the deal is finalized.
The Xbox Activision Blizzard acquisition story is developing and there will be plenty to unpack in the coming months. The games industry is already reacting to the news of Xbox’s latest big purchase, and the move could signal a shift towards the content wars versus a traditional console war.
Matt T.M. Kim is IGN’s News Editor. You can reach him @lawoftd.
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