Activision Blizzard’s Formation and Evolution
Activision Blizzard, a prominent American video game developer and publisher, came into existence in 2008 through a merger between Activision and Vivendi Games, the latter of which was the parent company of the renowned Blizzard Entertainment. Activision’s roots can be traced back to the original Atari console, while Blizzard is celebrated for classic titles like Diablo, Warcraft, and StarCraft, as well as the massively multiplayer online role-playing game (MMORPG) World of Warcraft. Following the merger, Vivendi acquired a 52% stake in the new company, allowing both Activision and Blizzard to maintain separate identities and independent publishing and development processes. The tech giant Microsoft announced its intent to purchase Activision Blizzard for a staggering $68.7 billion in January 2022, finalizing the acquisition in October 2023. The company operates its headquarters in Santa Monica, California.
The Origins of Activision
Activision was established in 1979 by game designers David Crane and Alan Miller, who left Atari due to disputes over creator rights, alongside entertainment executive Jim Levy. Their goal was to create a brand that recognized the contributions of designers, allowing lead developers to be credited on game packaging. Not long after its inception, fellow Atari designers Larry Kaplan and Bob Whitehead joined the team. As the first third-party software developer in the gaming industry, Activision faced legal action from Atari, which sought to maintain its monopoly on games for the Atari VCS system. The lawsuit concluded in 1982, by which point Activision had already carved out a successful niche in the marketplace, launching popular titles like Chopper Command and River Raid, and introducing Pitfall!, an early example of the platform game genre.
Challenges and Resurgence
Activision’s initial success led to a surge of imitators, flooding the market with subpar games. The industry experienced a significant downturn between 1983 and 1984 due to overexpansion. Activision adapted by redirecting its efforts toward the emerging home computer market, though a poorly timed acquisition of text adventure publisher Infocom nearly spelled disaster for the company. A corporate restructuring resulted in the loss of many creative talents, including the founders, and in 1988, Activision rebranded itself as Mediagenic in an attempt to diversify its software offerings. Despite struggling to remain relevant, a management overhaul in 1990 paved the way for a turnaround, leading to the revival of the Activision name in 1992 and the successful release of titles like Return to Zork and Pitfall: The Mayan Adventure.
Innovation and Industry Impact
The company welcomed a new wave of talented designers and enjoyed critical acclaim for PC titles like Interstate ’76, which foreshadowed later successes such as Grand Theft Auto. Strong partnerships with independent developers further bolstered Activision’s growth. Although production costs soared, Activision remained profitable throughout the late 1990s and early 2000s. In 2003, the launch of the Call of Duty franchise quickly positioned it as a competitor to Electronic Arts’ Medal of Honor series in the first-person shooter genre. The collaboration with developers RedOctane and Harmonix Music Systems for Guitar Hero catapulted the franchise into cultural prominence. Even though development ceased for Guitar Hero in 2011, other franchises like Call of Duty, Crash Bandicoot, and Spyro the Dragon continued to thrive.
The Rise of Blizzard Entertainment
Founded in 1991 as Silicon & Synapse by UCLA graduates Allen Adham, Michael Morhaime, and Frank Pearce, Blizzard Entertainment initially focused on converting existing titles for various home computer systems. The company soon began to develop original games, including The Lost Vikings and Rock ’N’ Roll Racing. Adopting the name Blizzard Entertainment in 1994, it released Warcraft: Orcs & Humans, a groundbreaking real-time strategy game that set the standard for its genre. The success of Warcraft was followed by its sequel, Warcraft 2: Tides of Darkness, which improved upon graphics and multiplayer capabilities.
Multiplayer Gaming and Major Successes
Multiplayer gaming became a cornerstone of Blizzard’s popularity, particularly with the launch of Diablo, which introduced Battle.net—a free service that enabled players to engage in multiplayer gaming and chat online. The player base expanded significantly with the release of StarCraft, which, while offering a strong single-player campaign, excelled in its balanced multiplayer experience. The sequel, Diablo II, further refined these multiplayer features, while Warcraft 3: Reign of Chaos blended role-playing elements into the traditional RTS format, enabling users to create custom maps and modify gameplay.
World of Warcraft’s Impact
The next installment in the Warcraft series, World of Warcraft (WoW), was a departure from the RTS roots of its predecessors, launching in 2004. WoW captivated millions with its persistent online world of Azeroth, enriched by the lore of previous Warcraft titles. The game’s social networking features significantly contributed to its appeal, boasting over 12 million monthly subscribers by October 2010.
Subsequent Releases and Innovations
After several delays, StarCraft II: Wings of Liberty was released in July 2010, accompanied by an enhanced Battle.net platform that improved matchmaking and user experience. The launch of Diablo III in 2012 broke records, selling more than 3.5 million copies on its first day. Despite delays in developing sequels for its franchises, Blizzard ventured into the first-person shooter market with the successful team-based game Overwatch in 2016.
Workplace Issues and Microsoft’s Acquisition
In 2016, Activision Blizzard acquired King Digital Entertainment for $5.9 billion, demonstrating its commitment to the growing mobile gaming sector. Although profits remained strong, the company soon faced scrutiny due to reports of a toxic workplace culture. A two-year investigation by the California Department of Fair Employment and Housing (DFEH) revealed a “frat boy workplace culture,” where female employees faced discrimination and harassment. In response to these allegations, Activision Blizzard settled a suit with the U.S. Equal Employment Opportunity Commission for $18 million.
The ensuing scandal led to the resignation of high-ranking executives, including the president of Blizzard and calls for CEO Bobby Kotick’s resignation. Kotick, who had transformed the company from near bankruptcy to a powerhouse following the merger with Blizzard, was implicated in attempts to downplay the severity of workplace issues. Following a significant drop in company stock and a mass walkout by employees, Microsoft entered discussions to acquire Activision Blizzard. In January 2022, Microsoft announced its plan to purchase the company for $68.7 billion. Regulatory bodies raised concerns regarding the acquisition, prompting Microsoft to assure that Call of Duty titles would remain available on rival platforms. The acquisition was finalized on October 13, 2023, the same day Kotick announced his resignation, effective at year-end.
