In his first interview following the news that Xbox is acquiring Activision Blizzard for nearly $70 billion, Activision CEO Bobby Kotick says the deal is necessary to compete against trillion worth competitors.
In conversation with VentureBeat Kotick says Activision Blizzard is lagging behind a playing field that includes companies like Tencent, Netease, Amazon, Apple, Google, Facebook, Netflix and Sony.
“It’s a reality that started to play into our mindset. There’s more competition from bigger companies with more resources,” Kotick says. “Facebook gives [miljarden] out per year to the metaverse. I’ve never seen so much competition and we see it even in the inflation of salaries.”
Activision Blizzard has sales of about $8 billion according to analysts, which is no small amount. But for context, Microsoft is valued at over $2 trillion. Other tech giants like Netflix are trying it with games and Facebook has renamed itself Meta and is positioning the VR platform as a key product.
According to Kotick, Microsoft is offering a 45% premium over the share price, which was an enticing offer that the CEO had to think seriously about looking at the industry. Ultimately, Kotick decided that a partnership with Microsoft and Xbox was the way to go.
“I think, you think, ‘oh, ‘we are this big company and we have big resources.’ says Kotick. “But when you compare yourself to you know, $2 trillion and $3 trillion or 4500 trillion companies, you realize maybe we were a big company in gaming, but now when you look at the competitive landscape, it’s a different world than ever.”
Of Activision’s current sexual harassment scandal played a role Kotick couldn’t say much, other than that it had affected the share price somewhat. And even then, Kotick says delaying Overwatch and Diablo had more of an impact on that.
Kotick also didn’t elaborate on his staying on as CEO after the Activision-Microsoft deal closes. Currently, Kotick remains CEO and says he will stay as long as necessary. Messages from sources, on the other hand, say that Kotick is expected to leave once the deal is finalized.