Activision’s Ownership Stake in Xbox: A Comprehensive Analysis

Activision does not own Xbox. To be unequivocally clear, Microsoft owns Xbox. The relationship is now inverted: Xbox (owned by Microsoft) owns Activision Blizzard. This follows the monumental acquisition that finalized in October 2023, where Microsoft successfully purchased Activision Blizzard for approximately $69 billion. Activision Blizzard is now a subsidiary of Microsoft Gaming, a division led by CEO Phil Spencer.

The Reverse Acquisition: How Microsoft Gained Control of Activision Blizzard

The narrative surrounding Activision and Xbox has dramatically shifted. For years, both companies operated independently in the gaming landscape. Activision Blizzard, a behemoth in its own right, developed and published iconic franchises like Call of Duty, World of Warcraft, and Diablo. Xbox, a product of Microsoft, stood as a competing gaming console and service.

The game-changing moment arrived when Microsoft announced its intent to acquire Activision Blizzard in January 2022. What followed was a protracted period of regulatory scrutiny, primarily concerning antitrust issues. Concerns were raised that Microsoft’s acquisition would create an unfair advantage, potentially harming competition within the gaming industry.

Ultimately, after navigating global opposition from regulators, the acquisition received the necessary approvals, including the critical nod from UK regulators. As of October 2023, the deal closed, officially bringing Activision Blizzard under the Microsoft umbrella. This means Activision Blizzard, including its valuable intellectual property (IP) and development studios (like Infinity Ward and Treyarch), is now owned and operated by Microsoft, specifically as part of the Xbox ecosystem.

The Implications of the Acquisition

This acquisition carries significant implications for the gaming industry and specifically for the Xbox platform.

• Xbox Game Pass Boost: The immediate benefit for Xbox is the influx of Activision Blizzard’s blockbuster titles into the Xbox Game Pass subscription service. This will provide subscribers access to a vast library of games, including the enormously popular Call of Duty franchise.

• Enhanced Content Library: Microsoft now possesses a much more diverse and appealing content library to offer on its platforms. This includes PC, console, and cloud gaming services.

• Potential for Exclusivity: Although Microsoft has committed to keeping Call of Duty on PlayStation for the foreseeable future, the future of other Activision Blizzard titles remains uncertain. There’s speculation that some franchises, like Crash Bandicoot, Spyro, or even new Overwatch games, might become exclusive to the Xbox ecosystem in the future. This is, however, a subject of ongoing debate and speculation, with Microsoft emphasizing its intent to increase revenue rather than exclusively limit access to popular games.

• Growth in Cloud Gaming: The acquisition strengthens Microsoft’s position in the burgeoning cloud gaming market. Owning Activision Blizzard’s titles allows Microsoft to offer a more compelling and comprehensive cloud gaming experience through Xbox Cloud Gaming.

• Innovation and Development: The influx of talent and resources from Activision Blizzard can potentially fuel innovation and development across Microsoft’s gaming division. This could lead to new game development approaches, enhanced technologies, and a broader range of gaming experiences.

Frequently Asked Questions (FAQs)

Here are 15 frequently asked questions to further clarify the relationship between Activision and Xbox and the impact of the Microsoft acquisition:

1. How much did Microsoft pay for Activision?

Microsoft paid approximately $69 billion to acquire Activision Blizzard.

2. Who owns Xbox?

Microsoft owns the Xbox gaming brand and all its related assets.

3. Did Activision buy Xbox?

No, Activision did not buy Xbox. The opposite occurred: Microsoft (owner of Xbox) bought Activision Blizzard.

4. Who is the CEO of Xbox?

Phil Spencer is the CEO of Microsoft Gaming, which oversees Xbox Game Studios, ZeniMax Media, and Activision Blizzard.

5. Will Call of Duty become an Xbox exclusive?

Microsoft has committed to keeping Call of Duty on PlayStation under a binding agreement. However, the long-term exclusivity of future Call of Duty titles remains a possibility.

6. What other franchises did Xbox acquire with Activision Blizzard?

Besides Call of Duty, Microsoft acquired iconic franchises like World of Warcraft, Diablo, Overwatch, Crash Bandicoot, Spyro the Dragon, StarCraft, and many more.

7. Why did regulators initially try to block the Microsoft-Activision deal?

Regulators, such as the UK’s Competition and Markets Authority (CMA), were concerned about potential antitrust issues and the impact on competition in the gaming market, especially in the cloud gaming sector.

8. Will PlayStation still get Call of Duty?

Yes, PlayStation will continue to receive Call of Duty titles due to an agreement between Microsoft and Sony.

9. What does the acquisition mean for Xbox Game Pass?

The acquisition means that Activision Blizzard’s games will likely be added to Xbox Game Pass, providing subscribers with access to a vast library of popular titles.

10. What all companies are owned by Activision?

Activision Blizzard owns studios such as Infinity Ward, Treyarch, Raven Software, Sledgehammer Games, and Toys for Bob. These studios are now under Microsoft’s ownership.

11. Will Blizzard games become Xbox exclusive?

While Microsoft has not made definitive statements, the potential for exclusivity exists for some Blizzard games in the future. However, games like Diablo and World of Warcraft make significant revenue on other platforms, making exclusivity less likely.

12. Does Microsoft own Spyro now?

Yes, with the acquisition of Activision Blizzard, Microsoft now owns the Spyro the Dragon franchise.

13. Will Crash Bandicoot leave PlayStation?

The future of Crash Bandicoot on PlayStation is uncertain. While existing agreements might allow continued availability, future titles could become exclusive to the Xbox ecosystem.

14. Why didn’t Sony buy Activision?

Sony’s market capitalization is significantly less than the acquisition cost of Activision Blizzard, making the purchase financially unfeasible.

15. What are the long-term benefits of the Activision Blizzard acquisition for Microsoft?

The long-term benefits include increased revenue, a stronger position in the gaming market, a more diverse content library, and the potential for innovation and growth in cloud gaming and other gaming-related technologies. Microsoft’s acquisition can significantly strengthen gaming education as well, where Games Learning Society and other similar institutions explore the use of games for education and learning purposes. Visit GamesLearningSociety.org for more information.

The Future Landscape

The acquisition of Activision Blizzard by Microsoft represents a paradigm shift in the gaming industry. While the immediate effects are clear – a boost for Xbox Game Pass and access to iconic franchises – the long-term implications are far-reaching and will continue to unfold in the coming years. The industry will be watching closely to see how Microsoft leverages its new assets to innovate, compete, and shape the future of gaming.