Activision has been buffeted for months by allegations of misconduct and unequal pay, and that was addressed Tuesday by Microsoft CEO Satya Nadella in a conference call with investors.
Microsoft's largest acquisitions (before Activision Blizzard)
• LinkedIn (2016), US$26.2 billion
• Skype (2011), US$8.5 billion
• Software development hub GitHub (2018), US$7.5 billion
• Nokia's mobile phone business (2014), US$7.2 billion
• Digital ad techn firm aQuantive (2007), $6.3 billion
"The culture of our organization is my number one priority," Nadella said, adding that "it's critical for Activision Blizzard to drive forward on its" commitments to improve its workplace culture.
Activision disclosed last year it was being investigated by the Securities and Exchange Commission over complaints of workplace discrimination. That was after California sued the Santa Monica-based company in July, citing a "frat boy" culture that had become "a breeding ground for harassment and discrimination against women."
The Wall Street Journal reported yesterday that, under pressure from investors and business partners, Activision has fired or pushed out more than three dozen employees and disciplined about 40 others since July as part of efforts to address allegations of sexual harassment and other misconduct
Activision CEO Bobby Kotick will retain his role, and he and his team will maintain their focus on driving efforts to further strengthen the company's culture and accelerate business growth.
Wall Street saw the acquisition as a big win for Activision Blizzard Inc. and shares soared 27 per cent in early trading Tuesday, making up for losses over the past six months since California's discrimination lawsuit was filed. Shares of Microsoft slipped less than 1 per cent.
Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, which is behind popular video games The Elder Scrolls, Doom and Fallout.
Microsoft, based in Redmond, Washington, said both acquisitions will help beef up its Xbox Game Pass game subscription service.
Started in 1979 by former Atari Inc. employees, Activision has been behind games such as "Guitar Hero" and the "World of Warcraft" franchise. Kotick has been CEO since 1991.
Microsoft said it expects the deal to close in the upcoming 2023 fiscal year, which starts in July. The Activision business unit would then report to Phil Spencer, who has led Microsoft's Xbox division and will now serve as CEO of Microsoft Gaming.