Allegedly, Embracer Group was behind the lawsuit against the deal, which in November 2022 was filed by the Swedish pension fund AP7.
Call of Duty: Warzone Mobile
The former head of Activision Blizzard revealed this during the ongoing legal proceedings with AP7. According to Bobby Kotick, Embracer Group aimed to sabotage the deal with Microsoft to improve its market position in California.
Kotick explained that at the time, Embracer Group was actively expanding its presence in California, so it was beneficial for them to weaken Activision Blizzard—one of the largest players in the local market. The company hoped that the lawsuit filed by AP7 would hinder Activision Blizzard's ability to "hire talented employees and grow through M&A," thus clearing space for Embracer Group.
Moreover, Kotick pointed out the timing of the lawsuit. The Swedish fund went to court just days before Embracer Group announced yet another delay of Dead Island 2 and released a financial report that lowered its profit forecast for the year. Consequently, the scandal surrounding the lawsuit helped divert investor attention and softened the drop in Embracer Group's shares.
Another beneficial side effect for Embracer Group, according to Kotick, was the increased workload on Activision Blizzard's teams after receiving the lawsuit. The company was forced to focus on the legal case, which impacted game development—for example, it canceled the survival game Project Odyssey and postponed Call of Duty: Warzone Mobile. This scenario favored Embracer Group, providing more opportunities to promote its own games.
Embracer Group itself denies collusion with AP7.
"Perhaps it's hard for Mr. Kotick to believe, but we neither needed nor need the help of the Swedish pension fund to compete with Activision," stated Embracer Group representatives in a comment to the media.