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The Biggest Deal In Gaming Is Under Fire From U.S. Senators [tomshardware.com]:
Four U.S. senators have torpedoed Microsoft’s $69 billion deal for Activision [tomshardware.com]. They believe that the consolidation of the high-tech industry and corporate culture of gender misconduct at Activision could expand by the transaction. Democrat senators think that the planned takeover could undermine employees’ calls for accountability over alleged gender and sexual harassment at the game developer.
Senators Elizabeth Warren (D), Bernie Sanders (I), Cory Booker (D), and Sheldon Whitehouse (D) are distraught with the fact that Robert Kotick, chief exec of Activision, will remain at the helm of the game company until closing in 2023. With the same head, the culture of misconduct will not go away, they assume. Another point they are concerned about is the consolidation of the high-tech industry in general and its impact on the workforce. Given their concerns, they wrote a letter to the Federal Trade Commission in an attempt to block the deal.
“We are deeply concerned about consolidation in the tech industry and its impact on workers,” the letter obtained by the Wall Street Journal [wsj.com] reads. “This lack of accountability, despite shareholders, employees, and the public calling for Kotick to be held responsible for the culture he created, would be an unacceptable result of the proposed Microsoft acquisition.”
In their letter to the FTC, the legislators also point out that if completed, the transaction will allow Kotick to continue his work and get a hefty severance package, possibly, everything. At the same time, some 1,800 employees of Activision signed a letter [wsj.com] demanding Kotick’s resignation. Microsoft denies that Kotick is en route for a golden parachute.
The senators demand that FTC oppose the deal if it finds that it can worsen the negotiating position between workers and companies (in this case, Microsoft represents both entities).
Microsoft commented on the letter saying that the deal compels both stakeholders and employees but never commented on gender and sexual misconduct.
“This is a compelling transaction for all stakeholders, including employees,” Lisa Tanzi, corporate vice president and general counsel at Microsoft, told the WSJ. “We believe Activision Blizzard will continue making progress [in the misconduct situation], and we are committed to further progress after the deal closes.”
Activision owns popular franchises like Call of Duty, World of Warcraft, and Candy Crush, available on a wide variety of platforms. Given Microsoft’s global strategy of being multiplatform, relying on the cloud, and selling first-party games for Windows PCs and Xbox consoles, it is not surprising that it wants to get Activision with all of its franchises. The question is whether Microsoft is ready to include Activision’s culture.