Microsoft Faces a Major Challenge in Cleaning Up Activision Blizzard's Culture
The success of Microsoft's biggest deal ever rides on rehabilitating Activision Blizzard's culture, Microsoft CEO Satya Nadella declared after announcing the $68.7 billion (roughly Rs. 5,10,990 crore) transaction.
Accomplishing that will require Microsoft to deviate from its usual hands-off approach on acquisitions to tackle what amounts to a “clean up” job of fixing the famed maker of the Call of Duty games franchise, which faces multiple accusations of sexual harassment and misconduct, analysts and management experts say.
Microsoft has traditionally allowed the companies it acquires to run autonomously, RBC Capital Markets analyst Rishi Jaluria said. In recent years, Microsoft purchased LinkedIn, GitHub, Skype, and Mojang, the Stockholm-based creator of the video game series Minecraft, all of which have not seen major changes since their acquisitions.
The Activision deal announced on Tuesday will require a heavier hand. Since July, Activision has faced a lawsuit from California regulators alleging the company "fostered a sexist culture." It also has been the subject of investigative stories detailing allegations of sexual harassment internally, and its employees have staged walkouts to protest Activision's response to the issues. Activision said it received requests from the US Securities and Exchange Commission for information "regarding employment matters and related issues," and is cooperating with the agency.
Activision CEO Bobby Kotick, whose handling of the alleged misconduct has attracted media scrutiny, is expected to leave the company after the transaction closes, according to one source. However, “cultural issues are never one person,” Jaluria said. “There is going to be a lot more work for Microsoft.”
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