As part of Microsoft’s plan to acquire Activision Blizzard for $68.7 billion, the software giant has created a Microsoft Gaming division. Phil Spencer, former head of Xbox, will now lead this team as it focuses on gaming across Xbox, PC, mobile, and the cloud. It’s a big promotion for Spencer, described as the Xboss by Xbox fans.
Spencer originally took over as the head of Microsoft’s Xbox division in 2014, reporting to former Windows chief Terry Myerson. In a sign of how gaming has changed at Microsoft under Spencer, he quickly moved into Microsoft’s senior leadership team in 2017, reporting directly to Microsoft CEO Satya Nadella as the corporate vice president of gaming. After more than 30 years at the company, Spencer is now CEO of Microsoft Gaming, as it looks to tackle mobile gaming, the metaverse, and cloud gaming with more than 20 game studios.
Microsoft is now willing to spend billions on acquisitions to bolster its gaming efforts after acquiring Bethesda last year for $7.5 billion. Activision Blizzard won’t be a particularly easy acquisition for Microsoft, though. The troubled company has been struggling to address concerns from employees over a myriad of sexual misconduct allegations. Spencer and his Microsoft Gaming team will certainly have a lot of work to do to ensure the culture inside Activision Blizzard is addressed.
Here’s what Microsoft Gaming CEO Phil Spencer had to say about his new role and the company’s gaming efforts in an email to staff today:
Welcome back from the holidays. To start, I’d like to thank everyone for all of the hard work and dedication that have built this business and this community. Obviously, today’s agreement to acquire Activision Blizzard is incredibly exciting. In fact it’s a milestone for our company, our business and our industry. I and the entire Gaming Leadership Team are deeply enthusiastic about this opportunity. We also announced this morning that we have surpassed 25 million Game Pass subscribers across console, cloud and PC, a great achievement for all of Team Xbox.
As players and partners, we all know how talented and dedicated the teams and studios are across Activision Blizzard. The legendary games and franchises across that company have delighted millions of people for decades. Coming together, we can accelerate our mission to extend the joy and community of gaming to everyone. We have the capability and opportunity to build simply the best, most engaging, most fun entertainment ecosystem anywhere.
Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players. We deeply value individual studio cultures. We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect. We hold all teams, and all leaders, to this commitment. We’re looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard.
We expect this acquisition to close in FY23, pending regulatory approvals. Once the acquisition is completed, the Activision Blizzard business will report to me. In the meantime, we know you will have a lot of questions. The Gaming Leadership Team and I look forward to answering as many as we can at our next Monthly Gaming Update on Jan. 26. You can submit your questions now anonymously, or post them on our Team Xbox Yammer. Please also refresh on our corporate social media guidelines.
As Satya mentioned, I am now CEO, Microsoft Gaming. This change is a reflection of the incredible work each of you are doing to create the best entertainment ecosystem anywhere. As a leadership team, we know how much exciting but difficult work we have ahead of us, so it’s crucial that we operate as a single, unified team. To that end, I’m excited to announce effective today that Jerret West, CMO of Gaming, and his marketing team will move from Chris Capossela’s organization to report directly to me. Jerret will continue to be a member of Chris’ leadership team and leverage critical parts of Microsoft’s marketing muscle including Communications, Media, and Consumer Sales.
We will have a webcast for investors and media at 6 a.m. PT to discuss the Activision Blizzard transaction and our plans as Microsoft Gaming. Please join if you can.
Microsoft CEO Satya Nadella also sent his own email to staff about today’s announcements. Nadella describes gaming as playing “a critical role in the development of metaverse platforms,” that the company is looking to develop for Xbox, Microsoft Teams, and beyond.
I’m thrilled to share that this morning we announced an agreement to acquire Activision Blizzard in an all-cash transaction valued at $68.7 billion. Activision Blizzard is one of the largest game publishers worldwide across console, PC and mobile, and it’s home to nearly 400 million monthly active players, along with iconic games including Call of Duty, Candy Crush, World of Warcraft and Diablo.
Gaming has been key to Microsoft since our earliest days as a company. Today, it’s the largest and fastest-growing form of entertainment, and as the digital and physical worlds come together, it will play a critical role in the development of metaverse platforms.
Together with Activision Blizzard, we believe we have an incredible opportunity to bring the joy and community of gaming to everyone on the planet, and we will invest and innovate to create the best content, community and cloud for gamers. We want to make it easier for people to connect and play great games wherever, whenever and however they want.
This agreement is a testament to the impact our gaming team has delivered, and I am deeply grateful for their hard work and commitment. Over the past few years, we’ve expanded our content pipeline and have become leaders in game subscriptions, as well as cloud gaming. And this holiday it was especially gratifying to see the response from fans and read the great reviews of our new first-party titles.
Effective today, Phil Spencer will become CEO, Microsoft Gaming. When the acquisition closes, the Activision Blizzard business will report to Phil. We look forward to extending our journey to create a more diverse and inclusive culture to our new colleagues at Activision Blizzard, and ensuring all our employees can do what they love, while thriving in a safe and welcoming environment — one where everyone feels empowered to do their best work.
I will be hosting a webcast with investors at 6 a.m. PT with Phil and Amy, as well as Bobby Kotick, the CEO of Activision Blizzard, to share more details on our big ambitions for gaming. Please join if you can.
Update, January 18th 10:50AM ET: Article updated with Microsoft CEO Satya Nadella’s memo to staff.