Microsoft to acquire Activision Blizzard, video game company accused of creating a 'breeding ground for harassment'

Activision Blizzard, the famed video game company that has been grappling with allegations of sexual harassment, is set to be acquired by Microsoft.

Microsoft confirmed Tuesday it will acquire the publisher behind hit games like World of Warcraft, Call of Duty, and Overwatch in a deal valued at $68.7 billion. Activision Blizzard CEO Bobby Kotick will continue in his role at the head of the company, the announcement said.

The acquisition comes after Activision Blizzard was hit with a bombshell lawsuit by the California Department of Fair Employment and Housing last year, which alleged the company created a "breeding ground for harassment and discrimination." According to the lawsuit, female employees "almost universally confirmed" that working for Activision Blizzard "was akin to working in a frat house, which invariably involved male employees drinking and subjecting female employees to sexual harassment with no repercussion."

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Activision Blizzard denied the lawsuit's claims, but in July, current and former employees criticized the company's response, which they said "creates a company atmosphere that disbelieves victims." In November, The Wall Street Journal reported that Kotick knew about sexual misconduct allegations at the company for years. Activision Blizzard has fired or pushed out over three dozen employees since July, according to the Journal.

Microsoft said Tuesday the acquisition of Activision Blizzard will help ​​bolster the portfolio of games offered on Game Pass, the Netflix-like subscription service that has become a major priority for the company. In 2020, Microsoft announced it would acquire Bethesda, the company behind the hit Fallout and The Elder Scrolls games, for $7.5 billion in what was at the time its largest video game purchase ever.

Microsoft noted that after the Activision Blizzard deal closes, it will "become the world's third-largest gaming company by revenue" after Tencent and Sony. Microsoft Gaming CEO Phil Spencer said, "We're looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard."