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Bobby Kotick leaves Activation Blizzard next week amid Xbox shake ups

An internal memo from Microsoft confirmed that Bobby Kotick, the controversial CEO of Activision Blizzard, will leave the company on December 29.

Bobby Kotick has been CEO of Activision Blizzard — the company behind popular game franchises like Call of Duty, Candy Crush, Crash Bandicoot, and Diablo — since 1991 and is one of the most derided executives in the video game industry. Workplace conditions at companies owned by Activision Blizzard were problematic during his reign, with this all coming to a head in a 2021 lawsuit that exposed lots of misconduct, some of which allegedly applied to Kotick. He’s stayed with the company through all that and is now leaving following Microsoft’s acquisition of Activision Blizzard.

“I will always be profoundly grateful to the people who contributed tirelessly to building this company, and I am confident you will keep inspiring joy and uniting people through the power of play,” Kotick said as part of a message about his impending departure.

Activision Blizzard CEO Bobby Kotick.
Activision Blizzard

According to The Verge, Bobby Kotick will step down from his role on that day and will not have a direct replacement. Instead, Microsoft will have Vice Chair Thomas Tippl, Activision Publishing President Rob Kostich, and Blizzard President Mike Ybarra report to Matt Booty, Microsoft’s game content and studios president. It also reports that more executives, including Lulu Meservey and Humam Shakhnini, will leave between now and March 2024.

“I’d like to thank Bobby — for his invaluable contributions to this industry, his partnership in closing the Activision Blizzard acquisition, and his collaboration following the close—and I wish him and his family the very best in his next chapter,” CEO of Microsoft Gaming Phil Spencer said in a memo shared by The Verge. Spencer visited these newly acquired Activision Blizzard studios earlier in the year, and it now seems like Xbox leadership will have more direct control of them going forward.

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Tomas Franzese
Gaming Staff Writer
Tomas Franzese is a Staff Writer at Digital Trends, where he reports on and reviews the latest releases and exciting…
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The United Kingdom’s Competition and Markets Authority (CMA) delivered a shocker this week when it blocked Microsoft’s acquisition of Activision Blizzard on Wednesday. While a lot of focus on Microsoft’s fight was centered around whether or not the acquisition would give Xbox consoles an unfair advantage over PlayStation consoles, what ultimately decided it was a much smaller market: cloud gaming.
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Microsoft, king of cloud gaming
Cloud gaming may sound like a niche within the industry, but that's not entirely accurate. BrandFinance Managing Director Laurence Newell tells Digital Trends that “cloud-based services account for over 70% of Microsoft’s brand value, amounting to a staggering $137.5 billion.” That’s quite an eye-catching number that understandably would raise a regulator's alarm bells. However, Newell admits that gaming only makes up 8.5% of Microsoft’s revenue, and cloud gaming is an even smaller amount of that slice.
Despite its relatively small impact on the wider company, most of the experts I spoke to agreed that Microsoft has emerged as a cloud gaming leader thanks to its compatibility with a large segment of the Xbox Game Pass Ultimate library. Conversely, Activision Blizzard has had almost no cloud gaming presence outside of one Sekiro: Shadows Die Twice port on Google Stadia before that service’s shutdown. If it were to be acquired, it is inevitable that more Activision Blizzard games would likely come to cloud-based gaming services.

Despite the shutdown of Google Stadia and the relatively small brand value received from cloud gaming compared to the rest of the company, the CMA still points out in the press release about its decision that “monthly active users in the U.K. more than tripled from the start of 2021 to the end of 2022. It is forecast to be worth up to 11 billion British pounds globally and 1 billion pounds in the U.K. by 2026.” Associate Professor of Strategy and Entrepreneurship at the UCL School of Management Joost Rietveld, who has also been a consultant for Microsoft during its acquisition process, challenges the notion that cloud gaming as a whole is a single market.
Instead, Rietveld splits it into four categories, placing Xbox Game Pass into a category called “cloud gaming as a feature,” which is when it’s “offered as part of a consumer-facing distribution platform” or “included within a bigger bundle of services provided by the platformer.” Under Rietveld’s view, services like Nvidia GeForce Now, Ubitius, and EE -- all of whom Microsoft has made individual deals to bring Activision Blizzard and Xbox Game Studios titles to -- fall into different categories and thus shouldn’t be considered or directly compared to Xbox Game Pass. No matter how they’re categorized now, the real question mark looming over the technology is its future growth, according to Omdia Senior Principal Games Analyst Steve Bailey.
“Will it remain a niche additional service or become the gaming platform of the future?” Bailey asks in his statement to Digital Trends. “Our projection is that cloud gaming is growing rapidly (revenue should more than double by 2026), but it’s still a long way from taking over the games market, so it remains arguable either way.”
“Arguable” stands out as the keyword to me here. Like any emergent technology, we’re heavily debating the positives and negatives of cloud gaming, specifically through the lens of this acquisition. But what exactly is it that the CMA sees in Microsoft that worries them?
The CMA’s problem with Microsoft
“The CMA’s argument is not that acquiring Activision Blizzard would allow Microsoft to dominate the console market as a whole, where Sony and Nintendo have strong positions relative to Xbox, but only that it would help it to achieve a dominant position in cloud gaming specifically,” Bailey tells Digital Trends. “Microsoft and Activision Blizzard will likely argue that this is disproportionate, given the relatively small scale of the cloud gaming market.”

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