1 00:00:00,000 --> 00:00:04,480 JUDY WOODRUFF: Microsoft announced plans today to buy Activision Blizzard, 2 00:00:04,480 --> 00:00:09,480 a huge leader in video game development, in a deal valued at $75 billion. 3 00:00:10,800 --> 00:00:14,000 But the acquisition comes with significant issues. 4 00:00:14,000 --> 00:00:19,000 There have been numerous allegations of sexual misconduct in the Activision workplace. 5 00:00:19,440 --> 00:00:22,720 Geoff Bennett looks at those concerns and what's behind the deal. 6 00:00:22,720 --> 00:00:27,680 GEOFF BENNETT: Judy, thanks to video games subscriptions and the Xbox, Microsoft is already 7 00:00:27,680 --> 00:00:32,680 a major player in the gaming market, an industry generating $175 billion a year in revenue. 8 00:00:34,480 --> 00:00:39,480 But acquiring Activision will allow Microsoft to up its own game during a pandemic-fueled 9 00:00:40,000 --> 00:00:44,480 gaming boom. Activision is the company behind major hits like "Call of Duty, 10 00:00:44,480 --> 00:00:49,480 "World of Warcraft," and "Candy Crush." And the takeover would make Microsoft the world's 11 00:00:49,760 --> 00:00:51,840 third largest gaming company. 12 00:00:51,840 --> 00:00:54,560 For more, we're joined by Kirsten Grind of The Wall Street Journal. 13 00:00:54,560 --> 00:00:55,920 Thanks for being with us. 14 00:00:55,920 --> 00:01:00,240 And, if you can, put this number in context for us, this $175 billion, the $75 billion 15 00:01:02,240 --> 00:01:06,240 acquisition. What does it mean for the gaming industry generally? 16 00:01:06,240 --> 00:01:11,240 KIRSTEN GRIND, The Wall Street Journal: It's huge. It's just one of the biggest deals, 17 00:01:11,440 --> 00:01:14,400 period, one of the biggest all-cash deals. 18 00:01:14,400 --> 00:01:16,400 And for the gaming industry, 19 00:01:16,400 --> 00:01:21,400 it really puts so much under one roof. So you had Xbox and now you have Activision's hits that 20 00:01:24,160 --> 00:01:29,160 will be Microsoft. So it gives Microsoft so much more might than it had before. 21 00:01:29,840 --> 00:01:34,840 GEOFF BENNETT: And Microsoft, which makes the Xbox consoles, owns studios that produce 22 00:01:35,840 --> 00:01:40,840 hits like "Minecraft," it's gotten more aggressive with gaming in the last several 23 00:01:41,040 --> 00:01:44,400 years. How does this acquisition play into their long-term tragedy? 24 00:01:44,400 --> 00:01:45,680 KIRSTEN GRIND: Right. 25 00:01:45,680 --> 00:01:50,680 Well, Activision has so many long term franchises. So, with the addition of Activision there, 26 00:01:53,440 --> 00:01:58,440 as you said, they become the largest gaming company by revenue worldwide. So, it absolutely, 27 00:02:00,800 --> 00:02:05,800 pending the deal's closure, makes them a very serious player in the space. 28 00:02:05,840 --> 00:02:09,600 GEOFF BENNETT: And this deal, as you know and as you have reported, 29 00:02:09,600 --> 00:02:13,840 this is coming as Activision faces multiple regulatory investigations 30 00:02:13,840 --> 00:02:18,840 into alleged sexual assault and mistreatment of female employees going back years. 31 00:02:19,120 --> 00:02:24,120 And just yesterday, Activision fired several of its own executives following its own 32 00:02:24,880 --> 00:02:29,120 investigation, its own review of what transpired. Give us a sense of what is 33 00:02:29,120 --> 00:02:34,120 happening within that company. And has Microsoft indicated how it will handle it moving forward? 34 00:02:35,840 --> 00:02:36,720 KIRSTEN GRIND: That's right. 35 00:02:36,720 --> 00:02:41,720 Well, Activision is really, quite frankly, in trouble with its culture at this point. 36 00:02:42,160 --> 00:02:47,160 It's facing three regulatory investigations, the state of California, the EEOC, the Securities 37 00:02:50,320 --> 00:02:55,320 and Exchange Commission. We have reported about mishandling of some of the misconduct allegations. 38 00:02:56,160 --> 00:03:01,160 Its stock is down about 30 percent from the first of the lawsuits about its culture last summer. 39 00:03:03,600 --> 00:03:08,320 So it was facing pressure from employees, from shareholders. 40 00:03:08,320 --> 00:03:13,320 So this is a really -- it's kind of a good solution, really, for Activision at this point. 41 00:03:16,240 --> 00:03:20,160 GEOFF BENNETT: And based on your reporting, I mean, do you know what happens to 42 00:03:20,160 --> 00:03:24,720 Activision's CEO, Bobby Kotick? He's led the company for more than three decades, 43 00:03:24,720 --> 00:03:29,720 but there were allegations that he was aware of some of these complaints of misconduct, 44 00:03:30,800 --> 00:03:35,520 harassment, even assault, but yet that he neglected to share it with the board. 45 00:03:35,520 --> 00:03:37,440 KIRSTEN GRIND: That's right. 46 00:03:37,440 --> 00:03:42,440 We reported that in November.And that's actually kind of what led to Microsoft's approach when 47 00:03:43,760 --> 00:03:48,760 they were in the middle of all this turmoil after our story came out. And so Bobby actually is not 48 00:03:50,480 --> 00:03:55,480 expected to stay with the company after the deal closes. Again, these deals can 49 00:03:55,600 --> 00:04:00,400 take a very long time to close, and it's also pending a lot of regulatory approval. 50 00:04:00,400 --> 00:04:02,480 But, yes, he's not expected to stay. 51 00:04:02,480 --> 00:04:06,080 GEOFF BENNETT: Can you give us a sense of the nature of what's been alleged? 52 00:04:06,080 --> 00:04:08,320 KIRSTEN GRIND: Definitely. 53 00:04:08,320 --> 00:04:13,320 So, some of the regulatory agencies have alleged sexual harassment, sexual assault, 54 00:04:14,960 --> 00:04:19,960 gender pay disparity, just a broad range of workplace misconduct across the board. 55 00:04:22,160 --> 00:04:25,440 What we wrote about in our November story in The Wall 56 00:04:25,440 --> 00:04:28,400 Street Journal was about how Bobby Kotick himself 57 00:04:28,960 --> 00:04:33,960 knew about some of these workplace misconduct allegations and didn't tell the board about them. 58 00:04:34,720 --> 00:04:38,480 GEOFF BENNETT: Big picture, as we wrap up our conversation here, 59 00:04:38,480 --> 00:04:43,480 this acquisition is almost akin to Disney acquiring Marvel back in 2012. 60 00:04:44,160 --> 00:04:49,160 Microsoft will now own a huge piece of the gaming industry, as we have been discussing. 61 00:04:49,280 --> 00:04:51,600 What does this mean for gamers generally? 62 00:04:51,600 --> 00:04:56,560 KIRSTEN GRIND: You know, I think -- going back to the culture questions, 63 00:04:56,560 --> 00:04:59,840 I think this could be a very good thing for gamers. 64 00:04:59,840 --> 00:05:04,080 I think I heard a lot out there about how 65 00:05:05,280 --> 00:05:10,280 it was harder to get behind a company that was facing so many culture issues. And if a company 66 00:05:11,600 --> 00:05:16,600 like Microsoft can to help turn that around, I think that would be good for everyone, frankly. 67 00:05:16,640 --> 00:05:21,120 GEOFF BENNETT: Kirsten Grind, thanks so much for your reporting and your perspectives 68 00:05:21,120 --> 00:05:24,480 on this major deal between Microsoft and Activision. 69 00:05:24,480 --> 00:05:29,480 KIRSTEN GRIND: Thanks so much for having me.