Microsoft\u2019s plan to acquire games developer Activision Blizzard, announced Jan. 18, isn\u2019t just about gaming; it has consequences for CIOs, too.\n\nThe $68.7 billion value the deal puts on Activision Blizzard is only about 3% of Microsoft\u2019s market capitalization, and the two companies have sales and net incomes in similar proportion, so it\u2019s not going to weigh all that heavily on Microsoft\u2019s strategic direction.\n\nBut the deal will absorb about half of Microsoft\u2019s available cash, limiting its capacity in the near future to make other large acquisitions that could better serve CIOs.\n\nActivision Blizzard comes with a far larger price tag than any of Microsoft\u2019s other big purchases of recent years. These include speech recognition specialist Nuance Communications, for $19.7 billion in April 2021; ZeniMax Media, another games studio, for $8.1 billion in September 2020; version control platform GitHub, for $7.5 billion in 2018; social network LinkedIn, for $26.2 billion in 2016; or Mojang, developer of the game Minecraft, for $2.5 billion in 2014.\n\nMoving to the metaverse\n\nFor Microsoft, this deal isn\u2019t (just) about acquiring more gaming content for its Xbox and Windows platforms, but about creating the building blocks for the development of metaverse platforms.\n\nFacebook\u2019s change of corporate name to Meta Platforms brought the term metaverse to the fore last year, but the IT world happily adopted it from popular fiction years ago. IBM had a metaverse evangelist back in 2007.\n\nBut what exactly is a metaverse? Simply put, it\u2019s a virtual reality environment \u2014 something like Second Life, or the fantasy worlds found in many video games, but accessed through a VR headset such as Facebook\u2019s Oculus or Sony\u2019s PlayStation VR. (Microsoft\u2019s Hololens, in comparison, is an augmented-reality or mixed-reality headset because you can see the real world through the images it projects, making it unsuitable for visiting purely virtual worlds as reality will intrude.)\n\n\u201cWe believe there won\u2019t be a single, centralized metaverse and there shouldn\u2019t be,\u201d Microsoft CEO Satya Nadella said in conference call to discuss the deal. \u201cWe need to support many metaverse platforms, as well as a robust ecosystem of content, commerce, and applications.\u201d\n\nThere\u2019s a metaverse of sorts creeping into the workplace, too. With the move to working from home, many of us are familiar with videoconferencing services such as Zoom or Microsoft\u2019s Teams. These typically offer users \u2014 if their computer\u2019s video hardware is powerful enough \u2014 the option to hide the pile of laundry or the peeling paintwork behind them with a virtual backdrop. Teams goes one step further, allowing users to control not only how they present themselves, but also how they see colleagues, arranging their images around a virtual conference table or on virtual theatre seats on the screen in front of them.\n\nBandwidth and budget permitting, that experience can be taken even further, so that whichever direction meeting participants look, they all appear to be in the same virtual room.\n\nThere\u2019s no reason the office metaverse need stop at one room, though. Activision Blizzard will bring Microsoft experience of creating much larger virtual worlds, such as those of Call of Duty, a first-person shooter game in which typical maps span thousands of square meters (a large office building, or a small strip-mall) or World of Warcraft (where fans estimate the maps cover an area the size of Washington, DC).\n\nSoftware architect may soon take on a whole new meaning in the IT department org chart.\n\nCloud scale\n\nThese days, video games such as those that Activision Blizzard produces don\u2019t just run on consoles and PCs: They have extensive cloud computing components, too, demanding low latency and high reliability. Activision Blizzard made Google Cloud Platform its preferred hosting provider in January 2020, so one way Microsoft might wring additional value from this acquisition would be to move those workloads to Azure.\n\nWith demand highest out of office hours the gaming would be a good complement to Microsoft\u2019s business applications, allowing it to get a better return on its existing infrastructure investments. It\u2019s a post-acquisition path Microsoft has trodden before, moving workloads to Azure from LinkedIn\u2019s own datacenters and moving Mojang\u2019s games off of Amazon Web Services. Listen for the complaints from gamers if this cloud migration doesn\u2019t deliver.\n\nThe Kotick controversy\n\nActivision Blizzard will bring Microsoft not only entertainment, but also drama. California\u2019s Department of Fair Employment and Housing filed suit against the company in July 2021, alleging that the company discriminated against women on pay and promotion, and that its \u201cfrat-house\u201d culture led to incidents of sexual harassment.\n\nIts CEO Bobby Kotick was subpoenaed by the Securities and Exchange Commission in September 2021 as part of an investigation into his handling of reports of sexual misconduct at the company, and a November 16 story in The Wall Street Journal reported that he knew far more about the alleged incidents than he told the company\u2019s board.\n\nA petition by Activision Blizzard employees and contractors calling for Kotick\u2019s resignation has now garnered signatures from almost one-fifth of the company\u2019s workforce \u2014 but in its announcement of the deal, Microsoft said Kotick will remain in his position.\n\nIn a letter to employees announcing the deal Nadella said, \u201cWe 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.\u201d But keeping Kotick sends a mixed message about the workplace culture Microsoft wants to encourage.\n\nCIOs can clean up their own workplace by looking for signs of a sexual harassment problem and dealing with it early \u2014 but they shouldn\u2019t count on working from home or the use of virtual environments like the metaverse to keep things clean. A beta tester filed the first report of sexual harassment in Horizon Worlds, Facebook\/Meta\u2019s virtual reality social media service, just days before it opened to the public.