Activision Blizzard wanted to sell, so it approached Microsoft

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Activision Blizzard leadership and key ownership wanted to sell and was shopping itself around. In early November, the company brought that proposition to Microsoft. Xbox began working on the deal immediately, and the details came together over the holidays. Now, the two companies have agreed to terms on an acquisition that will close by the end of Microsoft’s fiscal 2023 in June of next year. But how did the industry get to this point? The answer to that lies within the volatility of making triple-A, big-budget games.

Activision Blizzard’s future was more uncertain than ever and not only because of the investigations into the alleged civil rights violations at its studios. Making massive blockbuster games was reaching an unsustainable level. While the publisher continues to have some of the biggest hits in the world, it has found it more challenging to commit resources to games outside of the Call of Duty brand. And in an industry where talent is in high demand, Activision struggled to attract the people that actually make the games. The company needed a reset, and that led its leadership to consider the possibility of selling to a larger corporation.

This might seem counterintuitive because Activision is responsible for the biggest franchise in the console space. Just yesterday, industry-tracking firm The NPD Group confirmed that Call of Duty: Vanguard was the No. 1 selling game in the United States in 2021 — No. 2, by the way, was 2020’s Call of Duty: Black Ops Cold War.

How could a company with the