Microsoft spent two years trying to buy Activision Blizzard. For Xbox CEO, that was the easy part

After two years co-piloting the greatest acquisition in online game historical past previous an onslaught of demanding situations, Xbox CEO Phil Spencer now strikes on to his subsequent quest: making Microsoft’s takeover of Activision Blizzard value the bother.

Microsoft, which owns the Xbox gaming machine, closed its $69 billion deal to buy game-maker Activision Blizzard on Friday after heading off international opposition from antitrust regulators and competitors.

It marks a career-defining second for Spencer, who first joined Microsoft as an intern in 1988 and has helmed Xbox since 2014. After years of lagging at the back of rival Sony’s PlayStation, obtaining Activision’s selection of in style sport titles provides Microsoft a unprecedented probability to catch up.

“His job really just starts today,” mentioned analyst Gil Luria, era strategist at D.A. Davidson, after the deal’s closure. “All he’s been doing is preparing for today where he actually gets to integrate the business.”

And it marks the finish of an generation for Activision Blizzard CEO Bobby Kotick, who is led the Southern California maker of Call of Duty and different blockbuster franchises since 1991 after serving to to buy it from chapter. Kotick mentioned he is serving to with the transition till the finish of the yr.

Activision Blizzard was nonetheless reeling from employee protests, complaints and govt investigations over allegations of place of job harassment towards ladies and unequal pay when Microsoft privately reached out about purchasing the corporate in 2021.

When the corporations introduced a deliberate merger in January 2022, Microsoft CEO Satya Nadella made transparent it might be “critical for Activision Blizzard to drive forward” on its commitments to improve its workplace culture.

That was just the start of Microsoft’s challenges in bringing home the deal. After negotiations with Spencer faltered, top rival Sony brought its concerns about losing access to the Call of Duty franchise to regulators around the world. The strongest opposition came from U.S. antitrust enforcers emboldened by President Joe Biden’s administration to take a tougher look at big tech deals, as well as their counterparts in the United Kingdom who finally relented in approving the deal Friday only after Microsoft agreed to make concessions.

“Microsoft didn’t have a choice. If they wanted to be long-term competitive with Sony and the PlayStation platform, they need to have a much more robust content offering,” Luria said.

But, “in retrospect, they should have read the writing on the wall in terms of the difficulty of closing the deal,” Luria said. “They needed to do the deal to stay competitive, but knowing what they know now, they might have done it differently.”

A key moment came in June, when a federal judge weighed the U.S. Federal Trade Commission’s attempt to block the merger while it awaited further review. In an unusual move for a CEO that telegraphed the deal’s importance, Spencer spent the better part of two weeks at the defendant table of a San Francisco courtroom conferring with Microsoft’s lawyers. The judge eventually dismissed the FTC’s request, though the agency is still seeking to unwind the deal.

Microsoft’s success in integrating Activision’s business is “not guaranteed, especially as its track record with acquisitions has been a mixed bag,” said George Jijiashvili, senior principal analyst at research and advisory firm Omdia. Last year, it spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, maker of Elder Scrolls and Fallout.

Microsoft’s two key game launches this year from its Bethesda merger, Redfall and Starfield, have “been met with mixed reactions at best,” Jijiashvili said. “However, with globally in style sport franchises comparable to Call of Duty now below its wing, the corporate is strategically a lot better located.”

Another problem for Microsoft shall be overcoming the team of workers demanding situations that dogged Activision prior to the takeover.

As of overdue ultimate yr, Activision Blizzard had 13,000 workers, about 72% in North America, in accordance to a regulatory submitting. Microsoft has already pledged it’s going to keep impartial if the just about 10,000 employees in the U.S. and Canada search to prepare right into a hard work union, part of a 2022 settlement with the Communications Workers of America intended to cope with U.S. political issues about the merger’s results.

“It is a new day for workers at Activision Blizzard,” mentioned CWA President Claude Cummings Jr. in a commentary Friday.

“Over two years ago, workers at Activision Blizzard’s studios captured the country’s attention through walkouts and other protests over discrimination, sexual harassment, pay inequity, and other issues they were facing on the job,” Cummings Jr. mentioned. “Their efforts to form unions were met with illegal retaliation and attempts to delay and block union elections. Now these workers are free to join our union through a fair process, without interference from management.”

In a Friday welcome electronic mail to Activision workers, Spencer mentioned he sought after to “reiterate that we hold ourselves to a high bar in delivering the most inclusive and welcoming experiences for players, creators, and employees.”