Activision Blizzard, GameStop, Electronic Arts, and the State of Video Game Companies in 2022

Joel Eisenberg

https://img.particlenews.com/image.php?url=3oP5jz_0dzX84ok00
Video GamingBranden Skeli, Unsplash

Author’s Note

This article is free of opinion and bias, and is based solely on accredited media reports and gaming organizations. Sources for this article include Microsoft.com, Sara Ashley O'Brien for CNN Business, Zackari Greif for GameRant.com, Jennifer Korn for CNN, Jason Schreier for Bloomberg.com, Shannon Liao for The Washington Post, Game Developers Conference 2022, VOANews.com, Oscar Gonzalez and David Priest for CNET.com, and Ben Gilbert for Business Insider.

Introduction

On January 18, 2022, Microsoft announced a major forthcoming acquisition. See here for a company article on the matter, entitled “Microsoft to Acquire Activision Blizzard to Bring the Joy and Community of Gaming to Everyone, Across Every Device.”

From the article: Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash. When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. The planned acquisition includes iconic franchises from the Activision, Blizzard and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming. The company has studios around the world with nearly 10,000 employees. Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.

Indeed, critics were quick to pounce, with several addressing Activision Blizzard’s often problematic culture prior to its acquisition.

See here for a January 27 CNN Business report on the matter, “Microsoft Makes a Big Bet That it Can fix Activision Blizzard's Troubled Culture,” written by Sara Ashley O'Brien.

Addressing the problematic culture that has so permeated Activision Blizzard, O’Brien reported: For months, Activision Blizzard has been under pressure to overhaul its workplace culture. A July lawsuit from a California government agency alleged the gaming behemoth had enabled a "frat boy" culture and claimed leadership and human resources personnel had turned a blind eye to complaints raised by female employees. At the time, the company criticized the lawsuit as "distorted." Now, in addition to acquiring the company behind such popular video games as Call of Duty and World of Warcraft, Microsoft could also inherit numerous workplace issues. Activision Blizzard employees have staged walkouts over what they see as its inadequate response to overhaul a toxic workplace and called for the resignation of the company's CEO, Bobby Kotick.

Activision Blizzard, however, is not the only gaming company to undergo such drastic change. The entire business has, in fact, become a victim of U.S. supply chain issues. See here for a September 21 GameRant.com article written by Zackari Greif, “The Gaming Hardware Supply Chain is Facing Yet Another Shortage,” and here for a December 2 CNN report, “Where Are All of the Consoles? How Gamers are Handling the Global Shortage,” by Jennifer Korn.

From the former report: Technology is an ever-evolving industry due to the many innovations that developers find each and every day. As part of that, new, powerful processors and more are produced by companies like Nvidia, AMD, and Intel in order to keep up with the advances to everyday products. Due to COVID-19, many lockdowns have hindered supply chains that create the hardware like Nvidia's GPUs necessary for devices such as high-end gaming computers. Unfortunately, reports are coming in that say that with the coronavirus variants going around, the issues with production are only getting worse.

To sum this up, the video game industry is presently facing issues regarding culture and equipment, as well as one more not mentioned: a shortage of workers. See here for Jason Schreier’s Bloomberg.com article, “Even After a Boom Year, It’s Hard to Hold Onto a Job in Gaming.” Though published in May of 2021, the cycle has continued as will be further elucidated. Also, see here for a December 22 Washington Post article written by Shannon Liao, entitled “The Video Game Industry is Closer to Unionization Than Ever Before.”

The former piece focuses on Covid and related financial repercussions on available jobs, while the latter addresses cultural issues such as discrimination and unfair working conditions which, in addition to our current pandemic, have heightened the job loss factor.

The State of Video Game Companies, 2022

Despite the prevailing tone in the above articles, all is not downbeat in today’s video game industry. See the 2022 Game Developers Conference (GDC) extensive “State of the Game Industry 2022” report here, as derived from a sampling of over 2700 game developers. If you have difficulty attaining access to the full report, click here and follow the instructions.

The introduction to the report encapsulates existing issues: The past year has seen some struggles and surprises. The ongoing pandemic has bolstered talks about permanent remote work options and unionization. Reports of toxicity and misconduct have forced the industry to take a hard look at behaviors that have run rampant for too long. It’s a time of transition—but if there’s one thing we know about game developers, it’s that they’re always up to the challenge.

In the meantime, companies like GameStop and Electronic Arts continue onward. GameStop, the nation’s largest video game retailer, endured headline-making controversy at the beginning of 2021. See here for VOANews.com article, “Controversy Over GameStop’s Stock Market Saga Explained.”

Further, as CNET.com elaborated upon in “Robinhood Backlash: “What You Should Know About the GameStop Stock Controversy” by Oscar Gonzalez and David Priest: Popular investing app Robinhood became the focus of the controversy after it decided to freeze trades for GameStop on Jan. 28. Shares of the video game retailer spiked after traders on Reddit began frantically buying the company's stock. GameStop shares have since came crashing down only to shoot up once again. 

At the same time last year, Electronic Arts lost its exclusive license to produce more of its top-selling “Star Wars” games. See here for Business Insider article, “It's Official: Disney's Long-Standing Exclusivity Deal on 'Star Wars' Games Just Ended, ”written by Ben Gilbert. Though Ubisoft and others will now develop and sell “Star Wars” and related Disney product, Disney maintains EA will remain a valued though non-exclusive partner.

Conclusion

The video game industry has been fraught with battles in 2021 that continue to today. As with any other industry surviving and at times thriving during the pandemic era, the video game business at large will also continue to adapt.

Some will fall; some will become larger than ever and sustain their fortunes.

Time will tell.

Thank you for reading.

Comments / 2

Published by

I am an award-winning author, screenwriter for film and television, and producer. My mission on News Break is to share socially important perspectives on both culture and pop-culture. Member of PEN America, and the WGA.

Northridge, CA
131716 followers

More from Joel Eisenberg

Comments / 0