For the past year, the U.S. Federal Trade Commission and other regulatory bodies from around the world have deliberated over the surge of high-profile gaming acquisitions. Industry giants such as Microsoft, Sony and Take-Two Interactive have been aggressively acquiring studios in what has been described as the great consolidation of video games industry.
Among those cases, the Microsoft and Activision Blizzard merger has been especially contentious. If it goes through, the gargantuan $68.7 billion merger will be most expensive video game acquisition ever and the third biggest corporate deal of the decade.
Some Activision Blizzard employees have welcomed the merger in hopes that Microsoft leadership will clean house at the embattled game publisher, according to Bloomberg. The video game giant was sued by labor regulators in California last year; the state agency alleged that Activision Blizzard cultivated a “pervasive ‘frat boy’ workplace culture” that resulted in women leaving the company as well as the death of one employee by suicide in 2017.
Workers at Activision Blizzard have staged multiple walkouts in response to the lawsuit, over layoffs, and following the lifting of vaccine mandates at the company. Some employees have also called for CEO Bobby Kotick to step down.
Sony, one of Microsoft’s chief rivals in the gaming space, has publicly critiqued the merger. In comments submitted to Brazil’s antitrust regulator, Sony argued that the acquisition would eventually lead to Microsoft holding a monopoly over the market due to the massive popularity of Activision Blizzard’s Call of Duty franchise.
Saudi Arabia’s Public Investment Fund (or PIF), which has been investing heavily in various ventures to diversify the country’s assets beyond oil, has also been buying large stakes in various video game companies. This push into the game industry is being led by Saudi Crown Prince Mohammed bin Salman, who chairs the PIF. According to a 2018 profile in the New Yorker, the crown prince is a fan of Call of Duty.
When news of the Microsoft and Activision Blizzard acquisition broke, the PIF enjoyed a $1.1 billion boost thanks to its previous investment in Activision Blizzard. Similarly, on Aug. 19, Swedish holding company Embracer Group announced its acquisition of eight properties for an estimated $780 million, a power move made possible due to a $1 billion injection from the PIF via Savvy Gaming Group.
Saudi money remains a contentious subject in the game industry, due to Saudi Arabia’s history of violence and abuse directed toward dissidents, women, minorities, migrant workers and others. In June 2020, Riot Games announced that its “League of Legends” European Championship was partnering with Neom, Saudi Arabia’s planned smart city in Tabuk Province. The game’s fans lashed out against the company, and broadcast talent for the esport organized a strike in protest. In response, Riot canned the partnership just 16 hours after introducing it.
