WEBVTT 00:00.000 --> 00:04.480 JUDY WOODRUFF: Microsoft announced plans today to buy Activision Blizzard, 00:04.480 --> 00:09.480 a huge leader in video game development, in a deal valued at $75 billion. 00:10.800 --> 00:14.000 But the acquisition comes with significant issues. 00:14.000 --> 00:19.000 There have been numerous allegations of sexual misconduct in the Activision workplace. 00:19.440 --> 00:22.720 Geoff Bennett looks at those concerns and what's behind the deal. 00:22.720 --> 00:27.680 GEOFF BENNETT: Judy, thanks to video games subscriptions and the Xbox, Microsoft is already 00:27.680 --> 00:32.680 a major player in the gaming market, an industry generating $175 billion a year in revenue. 00:34.480 --> 00:39.480 But acquiring Activision will allow Microsoft to up its own game during a pandemic-fueled 00:40.000 --> 00:44.480 gaming boom. Activision is the company behind major hits like "Call of Duty, 00:44.480 --> 00:49.480 "World of Warcraft," and "Candy Crush." And the takeover would make Microsoft the world's 00:49.760 --> 00:51.840 third largest gaming company. 00:51.840 --> 00:54.560 For more, we're joined by Kirsten Grind of The Wall Street Journal. 00:54.560 --> 00:55.920 Thanks for being with us. 00:55.920 --> 01:00.240 And, if you can, put this number in context for us, this $175 billion, the $75 billion 01:02.240 --> 01:06.240 acquisition. What does it mean for the gaming industry generally? 01:06.240 --> 01:11.240 KIRSTEN GRIND, The Wall Street Journal: It's huge. It's just one of the biggest deals, 01:11.440 --> 01:14.400 period, one of the biggest all-cash deals. 01:14.400 --> 01:16.400 And for the gaming industry, 01:16.400 --> 01:21.400 it really puts so much under one roof. So you had Xbox and now you have Activision's hits that 01:24.160 --> 01:29.160 will be Microsoft. So it gives Microsoft so much more might than it had before. 01:29.840 --> 01:34.840 GEOFF BENNETT: And Microsoft, which makes the Xbox consoles, owns studios that produce 01:35.840 --> 01:40.840 hits like "Minecraft," it's gotten more aggressive with gaming in the last several 01:41.040 --> 01:44.400 years. How does this acquisition play into their long-term tragedy? 01:44.400 --> 01:45.680 KIRSTEN GRIND: Right. 01:45.680 --> 01:50.680 Well, Activision has so many long term franchises. So, with the addition of Activision there, 01:53.440 --> 01:58.440 as you said, they become the largest gaming company by revenue worldwide. So, it absolutely, 02:00.800 --> 02:05.800 pending the deal's closure, makes them a very serious player in the space. 02:05.840 --> 02:09.600 GEOFF BENNETT: And this deal, as you know and as you have reported, 02:09.600 --> 02:13.840 this is coming as Activision faces multiple regulatory investigations 02:13.840 --> 02:18.840 into alleged sexual assault and mistreatment of female employees going back years. 02:19.120 --> 02:24.120 And just yesterday, Activision fired several of its own executives following its own 02:24.880 --> 02:29.120 investigation, its own review of what transpired. Give us a sense of what is 02:29.120 --> 02:34.120 happening within that company. And has Microsoft indicated how it will handle it moving forward? 02:35.840 --> 02:36.720 KIRSTEN GRIND: That's right. 02:36.720 --> 02:41.720 Well, Activision is really, quite frankly, in trouble with its culture at this point. 02:42.160 --> 02:47.160 It's facing three regulatory investigations, the state of California, the EEOC, the Securities 02:50.320 --> 02:55.320 and Exchange Commission. We have reported about mishandling of some of the misconduct allegations. 02:56.160 --> 03:01.160 Its stock is down about 30 percent from the first of the lawsuits about its culture last summer. 03:03.600 --> 03:08.320 So it was facing pressure from employees, from shareholders. 03:08.320 --> 03:13.320 So this is a really -- it's kind of a good solution, really, for Activision at this point. 03:16.240 --> 03:20.160 GEOFF BENNETT: And based on your reporting, I mean, do you know what happens to 03:20.160 --> 03:24.720 Activision's CEO, Bobby Kotick? He's led the company for more than three decades, 03:24.720 --> 03:29.720 but there were allegations that he was aware of some of these complaints of misconduct, 03:30.800 --> 03:35.520 harassment, even assault, but yet that he neglected to share it with the board. 03:35.520 --> 03:37.440 KIRSTEN GRIND: That's right. 03:37.440 --> 03:42.440 We reported that in November.And that's actually kind of what led to Microsoft's approach when 03:43.760 --> 03:48.760 they were in the middle of all this turmoil after our story came out. And so Bobby actually is not 03:50.480 --> 03:55.480 expected to stay with the company after the deal closes. Again, these deals can 03:55.600 --> 04:00.400 take a very long time to close, and it's also pending a lot of regulatory approval. 04:00.400 --> 04:02.480 But, yes, he's not expected to stay. 04:02.480 --> 04:06.080 GEOFF BENNETT: Can you give us a sense of the nature of what's been alleged? 04:06.080 --> 04:08.320 KIRSTEN GRIND: Definitely. 04:08.320 --> 04:13.320 So, some of the regulatory agencies have alleged sexual harassment, sexual assault, 04:14.960 --> 04:19.960 gender pay disparity, just a broad range of workplace misconduct across the board. 04:22.160 --> 04:25.440 What we wrote about in our November story in The Wall 04:25.440 --> 04:28.400 Street Journal was about how Bobby Kotick himself 04:28.960 --> 04:33.960 knew about some of these workplace misconduct allegations and didn't tell the board about them. 04:34.720 --> 04:38.480 GEOFF BENNETT: Big picture, as we wrap up our conversation here, 04:38.480 --> 04:43.480 this acquisition is almost akin to Disney acquiring Marvel back in 2012. 04:44.160 --> 04:49.160 Microsoft will now own a huge piece of the gaming industry, as we have been discussing. 04:49.280 --> 04:51.600 What does this mean for gamers generally? 04:51.600 --> 04:56.560 KIRSTEN GRIND: You know, I think -- going back to the culture questions, 04:56.560 --> 04:59.840 I think this could be a very good thing for gamers. 04:59.840 --> 05:04.080 I think I heard a lot out there about how 05:05.280 --> 05:10.280 it was harder to get behind a company that was facing so many culture issues. And if a company 05:11.600 --> 05:16.600 like Microsoft can to help turn that around, I think that would be good for everyone, frankly. 05:16.640 --> 05:21.120 GEOFF BENNETT: Kirsten Grind, thanks so much for your reporting and your perspectives 05:21.120 --> 05:24.480 on this major deal between Microsoft and Activision. 05:24.480 --> 05:29.480 KIRSTEN GRIND: Thanks so much for having me.