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Activision Blizzard's (ATVI) Employees File for Unionization
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Activision Blizzard recently announced that its employees in Boston have filed for union representation. This marks the third unionization at the gaming company in just one year after Activision’s Raven Software employees and Blizzard’s Albany game testers voted for the same.
This gaming union at Boston not just comprises the quality assurance team, which tests video games for bugs and performance and is widely considered underpaid across the industry. For the first time at Activision Blizzard, the union also includes designers, animators, engineers and producers.
Such unions across all divisions speak of the discontentment of the company’s employees, which could hurt their efficiency, hence indirectly hindering the company’s performance.
The National Labor Relations Board has also accused Activision Blizzard of violating federal labor laws as the company has been threatening workers who used social media to discuss poor working conditions.
Microsoft Corp (MSFT - Free Report) , which is in talks of acquiring the gaming giant, has chosen to not indulge itself in the issue and remain neutral on it as the former itself is facing unionization that was filed last month at ZeniMax Studios.
Given the records of the previous two unions at Activision Blizzard, where the employees won despite the firm’s efforts to block the vote, it is expected that the gaming giant will have to lose to this unionization as well.
This will keep the company’s unfair practices in check and also help retain skillful employees that can aid the company’s growth with their high performance.
Update on the Activision Blizzard-Microsoft Deal
Besides the unionization, a bigger threat that is hovering over Activision Blizzard is its acquisition by Microsoft, which is receiving immense opposition from authorities in UK, Europe and America as they believe that this deal would harm competition in the gaming industry.
On the heels of this, 10 gamers too filed a lawsuit in the US Federal court as they feared that this acquisition would give Microsoft an outsized market power and create a monopoly in the video gaming industry.
Other gaming giants like Nintendo (NTDOY - Free Report) and Sony (SONY - Free Report) too have expressed their concerns over this takeover as this might lead to Microsoft not allowing the games of Activision Blizzard to be released on their consoles. The absence of such attractive games will cause them a huge loss of active users and a decline in their top line.
However, to address this, Microsoft has announced that it will make its most popular gaming franchise, Call of Duty available on Nintendo and Sony’s consoles for a minimum of 10 years if the purchase went through successfully.
Amid all this, Microsoft has shown its determination to acquire Activision Blizzard as it says that it is ready to fight back against authorities like Federal Trade Commission that are blocking the $75 billion deal.
This suggests that the deal, though with some terms and conditions or compromises, will get settled in 2023. This installs faith in the investors of Activision Blizzard as we see the share price increasing by 13.9% year to date against the Zacks Consumer Discretionary sector, which fell 36.2%.
The merger would also benefit the games of Activision Blizzard which currently has Zacks Rank #2 (Buy) with the cloud computing technology of Microsoft, which is a growing market. This would result in more advanced games and hence gain traction from players.
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Activision Blizzard's (ATVI) Employees File for Unionization
Activision Blizzard recently announced that its employees in Boston have filed for union representation. This marks the third unionization at the gaming company in just one year after Activision’s Raven Software employees and Blizzard’s Albany game testers voted for the same.
This gaming union at Boston not just comprises the quality assurance team, which tests video games for bugs and performance and is widely considered underpaid across the industry. For the first time at Activision Blizzard, the union also includes designers, animators, engineers and producers.
Such unions across all divisions speak of the discontentment of the company’s employees, which could hurt their efficiency, hence indirectly hindering the company’s performance.
The National Labor Relations Board has also accused Activision Blizzard of violating federal labor laws as the company has been threatening workers who used social media to discuss poor working conditions.
Microsoft Corp (MSFT - Free Report) , which is in talks of acquiring the gaming giant, has chosen to not indulge itself in the issue and remain neutral on it as the former itself is facing unionization that was filed last month at ZeniMax Studios.
Given the records of the previous two unions at Activision Blizzard, where the employees won despite the firm’s efforts to block the vote, it is expected that the gaming giant will have to lose to this unionization as well.
This will keep the company’s unfair practices in check and also help retain skillful employees that can aid the company’s growth with their high performance.
Update on the Activision Blizzard-Microsoft Deal
Besides the unionization, a bigger threat that is hovering over Activision Blizzard is its acquisition by Microsoft, which is receiving immense opposition from authorities in UK, Europe and America as they believe that this deal would harm competition in the gaming industry.
On the heels of this, 10 gamers too filed a lawsuit in the US Federal court as they feared that this acquisition would give Microsoft an outsized market power and create a monopoly in the video gaming industry.
Other gaming giants like Nintendo (NTDOY - Free Report) and Sony (SONY - Free Report) too have expressed their concerns over this takeover as this might lead to Microsoft not allowing the games of Activision Blizzard to be released on their consoles. The absence of such attractive games will cause them a huge loss of active users and a decline in their top line.
Activision Blizzard, Inc Price and Consensus
Activision Blizzard, Inc price-consensus-chart | Activision Blizzard, Inc Quote
However, to address this, Microsoft has announced that it will make its most popular gaming franchise, Call of Duty available on Nintendo and Sony’s consoles for a minimum of 10 years if the purchase went through successfully.
Amid all this, Microsoft has shown its determination to acquire Activision Blizzard as it says that it is ready to fight back against authorities like Federal Trade Commission that are blocking the $75 billion deal.
This suggests that the deal, though with some terms and conditions or compromises, will get settled in 2023. This installs faith in the investors of Activision Blizzard as we see the share price increasing by 13.9% year to date against the Zacks Consumer Discretionary sector, which fell 36.2%.
The merger would also benefit the games of Activision Blizzard which currently has Zacks Rank #2 (Buy) with the cloud computing technology of Microsoft, which is a growing market. This would result in more advanced games and hence gain traction from players.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.