LogInJason Schreier shared how Bobby Kotick took over the company.
Blizzard
Bobby Kotick is a famous name in the game industry. The former CEO of Activision Blizzard was a part of many controversies, but what was going on inside the company behind the scenes? Bloomberg's Jason Schreier shared an excerpt from his book Play Nice: The Rise, Fall, and Future of Blizzard Entertainment, showing Kotick's role in the company.
In 2007, Activision merged with Blizzard’s parent Vivendi Games, and Activision Blizzard was created. The co-creator of Blizzard Mike Morhaime and Kotick worked great together at first, but in 2013, Blizzard canceled Titan – a successor to World of Warcraft that later turned into Overwatch – costing the studio $80 million.
Titan was one of the reasons why Kotick had wanted to own Blizzard, and after this he bought Vivendi's shares to make Activision Blizzard independent, at the same time pressuring Morhaime about what went wrong with Titan.
“It was just Bobby’s continued sense that we were not ‘extracting enough value’ out of the IP,” says Gio Hunt, a former executive at Blizzard. “Even the way he’d say something like that would just make everyone at Blizzard upset.”
With time, Activision took a bigger role in Blizzard’s operations, pushing the developer to cut costs and release products more quickly. By 2021, the company appeared in the news often, but for the wrong reasons, like multiple sexual harassment lawsuits.
Then, after many months of court fights, Microsoft bought Activision Blizzard for $69 billion.
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So what went wrong? As Schreier reports, Blizzard valued players above profits, thinking a game “will be ready when it’s ready.” Kotick, on the other hand, was a businessman who believed in games with a “potential to be exploited every year across every platform.”
After Titan's fall, he made Morhaime bring a chief financial officer with experience at a publicly traded company, and Kotick's COO, Thomas Tippl, recommended Armin Zerza, who was a “sharp businessman” but with values different from Blizzard's.
Eventually, Blizzard did hire Zerza, who wanted to build a world-class finance department. His people started asking why Hearthstone wasn’t pushing players to buy card packs more often and why Overwatch wasn’t selling maps and heroes. You can probably see where it goes from here.
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Zerza then suggested Blizzard stop hosting BlizzCon because it's an expensive event that doesn't bring much money. The people and mindset he brought changed the company previously run by game enthusiasts. Recalling his previous experiences, he often asked “why Blizzard couldn’t just speed up development of a game by opening a new office, as he’d done to ship soap more quickly in Brazil.”
“Blizzard employees recall scoffing behind his back at his seeming inability to understand the video game industry, pointing out that no one would fly thousands of miles to attend a shampoo convention or meet their best friend through a shared love of their favorite toothpaste.”
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While he often agreed with Kotick, Zerza wasn't always of the same opinion. Kotick didn't force Blizzard to release games before they were ready, but he implied that the studio was letting its players down by not releasing content more often.
By 2017, Kotick and Tippl vs. Morhaime fights where extremely frequent, with Kotick wanting to cut the workforce that wasn't developing games. He also suggested giving the biggest bonuses to the people who delivered the largest profits, but Morhaime was against the idea, saying that it wasn't fair for developers who experimented with new ideas. Eventually, they hit a compromise, but the tension was always there.
In 2017, Tippl stepped down as Activision Blizzard COO, and the corporate desire for profits and Kotick's control had taken over the company. Later, Kotick set his gaze on competitive esports, wanting to charge Overwatch League team owners $20 million per franchise, which shocked many employees because Overwatch wasn't that famous.
At the same time, Kotick was hiring people "left and right" to realize his new passion. It became apparent that Blizzard wasn't as independent anymore.
At the end of his tether, Morhaime wrote an email to Kotick:
“I believe that preserving Blizzard’s culture and magic is a necessity for preserving Activision Blizzard’s advantage of having an organization that can attract and retain the best creative talent in the world and that can consistently produce the highest quality games and experiences,” he said. “It has been increasingly hard for me to provide Blizzard leadership and staff confidence that Blizzard has a stable future.”
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The difference between Morhaime and Kotick was obvious: the former cared about profits, but he “wasn’t a profit-motivated-first guy” like the latter.
In 2018, Morhaime stepped down from his position and left the company, tired of fighting with Kotick. “He looked like a second-term president,” one former executive told Bloomberg.
Blizzard's tale is as old as time: an idea vs. profits. In this case, we know what won in the end. Whether or not the company will return to its previous course now that Kotick is gone, we will learn in the future.
If you want to know more about this complicated story, buy Schreier's book when it comes out on October 8. Also, join our 80 Level Talent platform and our Telegram channel, follow us on Instagram, Twitter, LinkedIn, TikTok, and Reddit, where we share breakdowns, the latest news, awesome artworks, and more.