Bobby Kotick

Microsoft is in the process of acquiring Bobby Kotick’s Activision Blizzard for $68.7 billion in an all-cash deal. Although Kotick started creating what would become Activision Blizzard during his first year at the University of Michigan, he isn’t sad about handing the video game company over to Microsoft. In fact, he seems to see Microsoft as the best choice to usher Activision into the future of gaming and the metaverse.

“We were looking over the course of the next couple of years and starting to realize that we needed thousands of people to be able to execute against our production plans,” the Activision CEO told GamesBeat. “Competition for that talent is expensive and really hard to come by. We need them in disciplines like AI (artificial intelligence) and machine learning, or in data analytics, purpose-built cloud, and cybersecurity, and Activision Blizzard just doesn’t have that.”

Competition played a major role in the company’s decision to merge with Microsoft. “It’s a reality that started to factor into our thinking,” says Kotick. “There is more competition from bigger companies with more resources. For example, Facebook is spending [billions] a year on the metaverse. And I have seen as much competition. So whether it’s Riot, Epic, Tencent, Microsoft, Sony, or EA [Electronic Arts], there are just so many different places that people are recruiting talent.”

Microsoft CEO Satya Nadella has said he’s “grateful” for Bobby Kotick’s “leadership and commitment to real culture change.” Kotick will continue as CEO of Activision Blizzard throughout the acquisition, according to reports in Bloomberg and The Wall Street Journal. Afterward, Microsoft Gaming CEO Phil Spencer is expected to handle the business involving the video game holding company, which is headquartered in Santa Monica, California. 

According to Kotick, “When Phil called, it happened to be at a time where we [at Activision] were getting ready to start our long-range planning process, and realizing that these were going to be issues and challenges. Phil and I know each other well, and we have a great relationship, and the company has a great relationship. And when you start to think about all the skills we need, all the resources we need, and that they [at Microsoft] have, it made a lot of sense … The more we spent the time talking about how it would work, and what would happen, what resources were available, they clearly were the best partner.”

Bobby Kotick stands to walk away from Blizzard Activision with anywhere from 3.9 to 4.3 million shares in the company which equates to an approximate $400 million payday based on the $95 per share being offered by Microsoft.

Activision CEO Bobby Kotick: ‘The Competition Is Greater Than It’s Ever Been.’

“There is enormous competition for talent, [more] than I have ever remembered,” says Kotick, who seems confident the Microsoft merger is the best way to give Activision Blizzard a competitive advantage over other gaming companies. “It’s a great business challenge to have, but it required you to have access to a lot of talent. The competition is greater than it has ever been.” 

He cites Tencent as a company that owns pieces of multiple gaming companies. “They have unique access to the greatest market in the world, China, that we as a Western company do not have access to today,” Kotick explains. “And so the big strategic considerations for me and for the leadership are how do we make sure that we are prioritizing our opportunities.”

Will the Companies Complement Each Other?

News of the merger got a lot of gamers wondering if it meant Activision Blizzard games would stay on all platforms. “That was an important part of the discussions,” notes Bobby Kotick. “With Microsoft, most of the content they create has nothing to do with gaming. They’re on every device with a microprocessor and a display. [However] I do not think that they have any mobile business. So for them, King [the company behind Candy Crush Saga] was a very complementary thing.”

Phones are the future, according to Kotick. He says that over the next five years, “gaming is going to be more on phones than on any other devices. And I think that they have given us repeated assurances that our content will be available on as many devices as possible.” 

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