Microsoft’s announcement of a proposed acquisition of Activision Blizzard has caused a stir in the industry for several reasons. The ramifications for Microsoft’s library, Xbox Game Pass, exclusivity, and more. are all amazing. But much of the discussion has focused on what will ultimately happen to current Activision Blizzard CEO Bobby Kotick, who for months resisted pressure to step down amid allegations of a toxic work culture and lax leadership at best. With the news of the acquisition, Kotick is likely heading for a huge payday at the end of this process, which just doesn’t seem right. And while this, understandably, will be a hard pill for many to swallow, in practice it is important to focus on the positive measures that will improve working conditions for employees and the role we can play in ensuring that it happen.
First, to state the obvious: yes, it is viscerally frustrating for bad actors to be rewarded in society. It is unfair. We have a cosmic feeling that karma is not meant to work that way. So Kotick’s focus on payday is completely understandable. Assuming the allegations of one’s own culpability for failing to respond to a culture of harassment and abuse are true, it is extremely human to bristle at the thought that a big paycheck is coming as a reward for enabling the work culture that led to the many reports of toxicity at Activision Blizzard, and then for stubbornly refusing to step down.
To provide a thousand-foot view, however, Bobby Kotick is already obscenely rich, with a net worth valued at $870 million. This is a difficult level of wealth to pin down. That’s enough to last hundreds of lifetimes without working another day, before you even realize how investments and interest can themselves produce all the money you need to live comfortably. . The large payout that likely awaits Kotick upon completion of this acquisition likely won’t make his life any easier than it already will be. According to SEC documents, he would certainly receive a generous payout of more than $260 million upon leaving the company, whether an acquisition took place or not. It really is a case of the rich getting richer. His accumulation of even more wealth is frustrating on principle, not on practical grounds.
On the other hand, the acquisition could be Activision Blizzard’s best chance to make substantial and meaningful improvements to working conditions and studio culture. Microsoft is a large company with standardized structures for minimizing harassment in the workplace, and we have no reason to believe its management has permitted abuses similar to Activision Blizzard’s in terms of severity or scale. By most accounts, Microsoft is generally a good place to work, certainly compared to the company it just acquired. Having this culture in place and placing it at the top of the organizational power pyramid should help weed out the bad guys and set clearer expectations for conduct.
“[Kotick’s payout] will be a hard pill for many to swallow, from a practical perspective it is important to focus on the positive measures that will improve working conditions for employees and the role we can play in ensuring this happens. »
Perhaps more importantly, Microsoft should know exactly what it’s getting into with this acquisition. One of the reasons Microsoft was able to buy one of the biggest game publishers at a relatively low price is that the harassment scandal caused that price to drop. As noted by attorney Richard Hoeg, who also explained some antitrust intricacies, stock price and cultural issues are likely linked.
“What I find most interesting about the $95 per share price is how closely it matches Activision’s market price last year before its current troubles,” Hoeg said. “You could even argue that it’s not a premium to the true value of Activision’s underlying assets, and that Microsoft is, in effect, ‘buying low’ on the assumption that the price is depressed. for cultural reasons that can be ‘cleansed’ by acquisition (and related control of entities by Microsoft itself).”
So what we have is a company with a relatively clean and responsible reputation that acquires a business with everything but, at a price that has been depressed by the recent scandal, the implicit expectation of the market being that the parent company will help sort things out. It’s in Microsoft’s financial interest to clean up and reform Activision’s tattered image, remembering that it’s simply the right and ethical thing to do.
Now is the time to set expectations for Microsoft’s management of the business, and then plan to ensure Redmond follows through once the acquisition is complete. Microsoft will need to establish clear guidelines with consistent consequences for misconduct and a greater degree of transparency, and allow for a greater diversity of voices within Activision Blizzard’s various studios. Although Activision has apparently started eliminate toxic elements afterwards (and after a lawsuit in the State of California), a change in leadership can send a signal that such behavior will not be tolerated in the first place.
In the coming months, as Microsoft and Activision Blizzard finalize documents and clear regulatory hurdles, more news is sure to come out. It’s likely we’ll find out more about Bobby Kotick, who allegedly turned a blind eye to the rot in his business, getting a big payout. Again, this will feel bad in the gut and we as people who love the industry should voice our disdain for the behavior and condemn it. But when that happens, it’s also important to try to keep in mind that Kotick being and remaining incomprehensibly wealthy was going to happen regardless of an acquisition. Where our collective voice has more power now is in supporting those at Microsoft and Activision Blizzard who are working to improve conditions. There has never been a world where Kotick could suffer from any level of real financial resources, regardless of his level of responsibility, but we can contribute to a world where the new management of Activision Blizzard does not perpetuate the same type of irresponsibility and avoidance of consequences.
Microsoft buying Activision Blizzard gives workers their best shot at a healthier workplace. If a ousted CEO adds another pile of bills to his already huge pile of cash, that’s what it takes to make it happen, it will be worth it.