Activision is clearing out problematic staff before Microsoft’s $70 billion takeover

Microsoft is set to buy Activision Blizzard, the company behind video games including Call of Duty, World of Warcraft, and Candy Crush, in a nearly $70 billion all-cash deal.

Microsoft’s largest-ever takeover will make it the world’s third largest gaming company by revenue after Sony and Tencent, according to a company statement. “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all,” Microsoft CEO and chair Satya Nadella said today (Jan. 18).

It may not be coincidental that the deal comes as Activision is clearing house in response to allegations of sexual harassment and other types of misconduct at the company.

The deal is about mobile gaming

Mobile devices are by far the most popular way people play video games; in 2020 the mobile gaming industry brought in $77.2 billion in US revenue. Microsoft said it plans to capitalize on this trend with the Activision deal, allowing players to enjoy the video game developer’s “most-immersive franchises,” including Halo and Warcraft, “virtually anywhere they want.”

Microsoft already sells the Xbox gaming console, and owns several popular video game franchises, including Minecraft and Doom. In addition to immersive games such as Call of Duty, Activision also owns Candy Crush, which is the sixth highest grossing mobile game of all time. Microsoft said Activision’s mobile business “represents a significant presence and opportunity”.

Activision has fired dozens of employees over workplace misconduct

Activision continues to deal with allegations of sexual harassment and other misconduct at its offices, which employ some 10,000 people globally.

Activision agreed to pay $18 million to the Equal Employment Opportunity Commission in September to settle a case regarding alleged gender-based harassment and retaliation in its workplace. The Securities and Exchange Commission and the California Department of Fair Employment and Housing are continuing to investigate Activision’s culture and handling of these harassment allegations.

A company spokesperson confirmed to the Wall Street Journal today (Jan. 18) that Activision had fired or pushed out more than three dozen employees as part of their efforts to address these allegations. An additional 44 workers have been disciplined as part of Activision’s investigation. The spokesperson disputed reports that Activision has collected over 700 reports from employees concerned about workplace conduct and other issues since July.

Bobby Kotick had managed to stay on as Activision’s CEO despite reports that he knew about and downplayed allegations of sexual misconduct at the company. That’s likely to change with this deal, as both companies have reportedly agreed he’ll depart once it closes.