Xbox chief Phil Spencer says Microsoft is making progress on Activision deal

Microsoft Gaming CEO Phil Spencer said he's confident in the progress his company is making with regulators on getting the landmark $70 billion Activision Blizzard deal closed, according to a new interview with Bloomberg.

“I feel good about the progress that we've been making," Spencer said, "but I go into the process supportive of people who maybe aren't as close to the gaming industry asking good, hard questions about ‘what is our intent? What does this mean? If you play it out over five years, is this constricting a market? Is it growing a market?'"

The Activision deal, announced in January amid ongoing lawsuits alleging a pervasive culture of sexual harassment and discrimination at Activision Blizzard, is the largest in the history of the game industry by a wide margin. The deal has raised many questions about whether Microsoft could harm competition by owning the Xbox hardware ecosystem, a fast-growing internal division of game development studios and, if the deal passes, major video game franchises like Call of Duty, Candy Crush, Diablo, Overwatch and World of Warcraft.

Spencer's comments are among the most robust public statements regarding the deal from a Microsoft executive since shortly after it was announced. In recent regulatory filings in Brazil and elsewhere, Microsoft and Sony have butted heads over the potential ripple effects of the deal and what it could mean for the game console market, the game industry at large and lucrative game series like Call of Duty. While Saudi Arabia became the first country to formally approve the acquisition, Microsoft's biggest hurdles remain clearing the deal with the U.S. Federal Trade Commission, the E.U.'s European Commission and the U.K.'s Competition and Markets Authority.

Spencer told Bloomberg he believes Activision leadership is capable of fixing the company's broken culture. "I believe they're committed to that,” Spencer said. “When I look at the work that they're doing now — there's always more that can be done — but I believe from the studio leaders there that I know very well, some of them former Xbox members, that they're committed to this journey. And I applaud that regardless of the deal.”

Spencer also touched on subjects related to the deal that have struck a nerve with the larger game community, including a growing unionization movement both inside Activision and beyond and concerns Microsoft may use its ownership of Activision to withhold products from its primary competitor, Sony.

“I've never run an organization that has unions in it, but what I can say in working through this is we recognize workers' needs to feel safe and heard and compensated fairly in order to do great work,” Spencer said. “We definitely see a need to support the workers in the outcomes that they want to have.” Activision-owned studio Raven Software became the first major video game studio to unionize earlier this year after workers were victorious in their National Labor Relations Board election.

The union, consisting of more than two dozen quality assurance testers, has since inspired similar efforts at Activision studio Blizzard Albany. Though despite Microsoft's pledge not to fight unions and an unprecedented agreement with the Communications Workers of America, Activision leadership has insisted on deploying union-busting tactics against Blizzard Albany in a manner similar to its failed attempts to undermine the union at Raven, according to CWA representatives and members of Game Workers Alliance Albany group who are organizing the union.

On the subject of Call of Duty, Spencer echoed comments he and Microsoft made back when the Activision deal was first announced, including commitments to keep the popular shooter series on the PlayStation console both through existing agreements with Sony over the next few years and beyond that. Spencer said a new game release made exclusive to one hardware platform "is something we’re just going to see less and less of" over time, though Microsoft is making upcoming Bethesda releases it took ownership of, as part of its 2020 acquisition of ZeniMax Media, exclusive to its Xbox and Game Pass platforms.

“Maybe you happen in your household to buy an Xbox and I buy a PlayStation and our kids want to play together and they can't because we bought the wrong piece of plastic to plug into our television,” Spencer said. “We really love to be able to bring more players in reducing friction, making people feel safe, secure when they're playing, allowing them to find their friends, play with their friends, regardless of what device — I think in the long run that is good for this industry. And maybe in the short run, there's some people in some companies that don’t love it. But I think as we get over the hump and see where this industry can continue to grow, it proves out to be true.”