Abstract
Satya Nadella, appointed CEO of Microsoft since February 2014, envisioned Microsoft at the forefront of the video gaming competition. In September of that year, Nadella led the company in the acquisition of video-gaming publisher Mojang, popular for its world-building game Minecraft, for $2.5 billion.2 In 2015, Microsoft released Windows 10, which elevated its gaming features such as built-in support for Xbox Live and game streaming functionality. Further enhancing its Xbox offerings, Microsoft launched Xbox Game Pass in 2017, which was essentially “Netflix for video games,” allowing users to play games by paying a subscription fee. A year later, Microsoft introduced Project xCloud, a cloud gaming service which allows users to stream games on any device. During the early stages of the COVID-19 pandemic, Microsoft was unfazed in continuing with its strategy to expand the catalogue of franchises through acquisition of ZeniMax Media, a parent company of Bethesda Softworks. This added popular gaming franchises such as The Elder Scrolls, Fallout, and Doom. Nadella showed the world that Microsoft is not just another player in the video gaming industry. He had to make a statement to the world.
In the beginning of 2022, Microsoft sent shockwaves throughout the corporate universe with its announcement to buy Activision Blizzard, a legacy developer, publisher, and distributor of gaming entertainment plagued by toxic corporate culture, for a $68.7 billion valuation after net cash adjustments. The final value was $75.4 billion, and the deal was concluded on October 13, 2023. In comparison, the acquisition dwarfs Microsoft’s acquisition of Mojang, which was considered a pivotal move at the time. Nadella and his team knew that acquisition of Mojang would prove to be fruitful for Microsoft’s gaming division. However, Activision had been stained by scandals and misconduct, with Activision employees urging its former CEO Bobby Kotick to resign amidst investigations into workplace harassment. In addition to culture problems at Activision, the rise in regulatory scrutiny among tech giants poses legal challenges for Microsoft to move forward in the video gaming industry. How can Microsoft continue to expand in the video gaming market in the face of legal obstacles?
Document Type
Case Study
Publication Date
2024
Publisher Statement
Copyright © 2024 Ramid Kadirov. Please note that downloads of the case study are for private/personal use only
Written by Ramid Kadirov under the supervision of Jeffrey S. Harrison at the Robins School of Business, University of Richmond. Copyright © Ramid Kadirov. This case was written for the purpose of classroom discussion. It may be duplicated or cited for non-commercial educational use without specific permission from the author. Artificial Intelligence (AI) was used in preparation of this case.
Recommended Citation
Kadirov, Ramid, and Jeffrey S. Harrison. Microsoft and Activision Blizzard: The Rise of the Video Gaming Giant. Case Study. University of Richmond: Robins School of Business, 2024.
