Had good calls this week with leaders at Sony. I confirmed our intent to honor all existing agreements upon acquisition of Activision Blizzard and our desire to keep Call of Duty on PlayStation. Sony is an important part of our industry, and we value our relationship.— Phil Spencer (@XboxP3) January 20, 2022
Previously, it was announced that Microsoft announced they are acquiring Activision Blizzard in a $68.7 billion all-cash deal, inclusive of the company’s net cash. This will be the largest deal ever in the tech industry. Once the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony.
The deal is expected to close in the fiscal year 2023. The acquisition still needs to go through the hurdle of getting approval from the government, which could take a long process before they get the approval of the acquisition.
Current CEO of Xbox Phil Spencer has confirmed via Twitter, “Had good calls this week with leaders at Sony. I confirmed our intent to honor all existing agreements upon acquisition of Activision Blizzard and our desire to keep Call of Duty on PlayStation. Sony is an important part of our industry, and we value our relationship”
Activision Blizzard, has been embroiled with a lawsuit and sexual misconduct allegations that were occurring in the workforce. CEO and Owner, Kotick knew about these allegations, but he refused to do anything about them. The acquisition could possibly be a reason due to investors placing pressure on Kotick.
Microsoft, made an agreement with Kotick, that if the workforce conditions can show proof of a change, they would go ahead with their agreement of acquiring Activision. Microsoft stated that Activision was showing evidence of change, so decided to go ahead with the acquisition. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.
Activision Blizzard CEO Bobby Kotick is reportedly planning on stepping down after Microsoft completes the acquisition. Kotick has been facing pressure to resign over the company’s workplace misconduct scandal since last November.
Bobby Kotick stated, “What I told Microsoft is that I care so much about this company, that whatever role they want me to have, in making sure that we integrate the business and we get a proper and smooth transition, I’m willing to do,” Kotick said. “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.” “is just staying CEO and running the business,” but that reporting to Spencer “is an easy thing to do.”
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Labor Board Says Activision Blizzard Illegally Threatened Staff
The United Sates National Labor Board says that Activision Blizzard, the publisher behind such games as Call of Duty and Overwatch, illegally threatened staff and enforced a social media policy that conflicts with workers’ rights, according to Bloomberg.
This yet another negative mark on the company, and comes following a complaint filed with the NLRB filed against Activision Blizzard that claims employees were being threated for discussing wages and working conditions via the company’s internal Slack channel.
If Activision Blizzard does not settle this issue, the company will receive a formal complaint from the National Labor Relations Board’s regional director in Los Angeles.
Take-Two Interactive Acquires Zynga
Take-Two Interactive has officially completed it’s acquisition of mobile studio Zynga, following shareholder approval from both parties being completed last week.
With the acquisition, Take-Two now owns all outstanding shares of the company for approximately $12.7 billion, in what that company is describing as a “pivotal step” in their plans to expand their mobile side of offerings..
“We are thrilled to complete our combination with Zynga,” Take-Two chairman and CEO Strauss Zelnick said in an official announcement. “As we bring together our exceptional talent, exciting pipelines of games, and industry-leading technologies and capabilities, we believe that we can take our portfolio to another level of creativity, innovation, and quality.
“We are eager to continue building an unparalleled portfolio of games that will reach broader markets and lead to continued growth for this next chapter of Zynga’s history” Zynga CEO Frank Gibeau said.
Tencent Releases Q1 Financial Results, Gaming Accounts for 32% of Revenue
Chinese tech juggernaut Tencent has released it’s Q1 financial results, which ended on March 31st, and show a reported total revenues of RMB 135.5 billion ($21.3 billion), which is in-line with the $20.2 billion reported back in Q1 of 2021.
Additionally, Games account for 32% of Tencent’s $21.3 billion in revenue.
According to GamesIndustry.biz, Tencent profits are down 52% from RMB 23.7 billion ($3.7 billion), operating profit was down 15% year-on-year to RMB 36.5 billion ($5.8 billion). Operating margin decreased from 32% in Q1 2021 to 27%.
In regards to Tencent’s gaming side of the business, the revenue for domestic titles (those in China) sow a slight dip of 1%, attributed to “direct and indirect effects” of measures implemented in China to protect minors from excessive gaming.
Titles such as League of Legends: Wild Rift and Fight of The Golden Spatula saw a rise in revenue, but were offset by the declines in Call of Duty Mobile, among other titles.
In regards to titles outside of the market in China, gaming revenue spiked 4% year-on-year to RMB 10.6 billion ($1.6 billion), largely due to the success of Valorant and Clash of Clans, but Tencent did report a decline in revenue from PUBG Mobile, explaining “as user spending normalized post-COVID.”
Domestic games accounted for 24% of the company’s total quarterly revenues, slightly down from 25% in Q1 2021, with international games accounting for 8%, a rise from 7%.
Read more, including comments from Chief strategy officer James Mitchell, over at GamesIndustry.biz.
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