Microsoft's Activision Blizzard Buyout Likely Nixes CEO Bobby Kotick
Yesterday, Microsoft dropped a whopper of an announcement, revealing that it's paying nearly $70 billion to acquire Activision Blizzard. The acquisition comes at a controversial time for Activision Blizzard, as it finds itself in the middle of a sexual harassment and abuse scandal that has resulted in several high-profile departures. Activision Blizzard CEO Bobby Kotick has resisted calls for his resignation or firing throughout this scandal, which begs the question: Now that Microsoft is taking over, what happens to him?
For now, there isn't really a clear answer to that question. In a press release announcing the deal yesterday, Microsoft said, "Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company's culture and accelerate business growth. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming."
That statement can be taken in a couple of different ways. For instance, it could mean that Bobby Kotick will only stay on as Activision Blizzard CEO until the acquisition is complete and Phil Spencer takes over leadership through his role as CEO of Microsoft Gaming. On the other hand, it could also mean that Bobby Kotick will stay on after the acquisition and report directly to Spencer. It seems this statement was left purposefully vague so we wouldn't know for sure what's happening once the acquisition completes.
However, a report from The Wall Street Journal may fill in the gaps. Speaking to unnamed sources familiar with Activision Blizzard and Microsoft's plans, the WSJ reports both companies have agreed that Kotick will leave once the acquisition is complete. That's a pretty cut and dry claim, and with no official confirmation from either company at the moment, it's the best we have to go on.
In a GamesBeat interview published after the acquisition was announced, Kotick was similarly vague. Asked what he thinks of reporting to Phil Spencer and if retirement is something that's on the table, Kotick instead focused on the short term. "Right now my focus is just staying CEO and running the business," Kotick said. "And I think you probably could tell this from the stock price, there is still a long way between now and getting a deal approved, and all the regulatory issues. So I'm still going to be first focused on running the business."
Kotick then suggested that he was interested in staying on post-acquisition to help with the transition, saying, "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. 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."
So, we didn't get any direct answers about whether or not Kotick is staying on after the acquisition. It certainly sounds like Kotick wants to stay once the acquisition is complete, but Microsoft may decide that it's better to have Kotick out. Should that happen, Kotick is almost certainly in for a major payday, but Microsoft could determine that it's better to eat the cost of his severance than have someone who represents the "old" Activision Blizzard – one mired in sexual harassment and abuse allegations – stick around.
We'll find out soon enough. Microsoft expects the acquisition to close sometime in its 2023 fiscal year, which kicks off in July 2022. Of course, it could take a while for the acquisition to finish, as Microsoft and Activision Blizzard may attract antitrust scrutiny because of the size of the deal, but we'll let you know whenever the two companies share more details.