Microsoft Pays $250M to Settle Activision Merger Lawsuit

"Mr. Kotick intends to shine a light on the gross misconduct of the activists who invented the false narrative of misconduct at Activision, and to expose the relationship between those activists and AP7."

That was the language Bobby Kotick's legal team used in a countersuit earlier this year, swinging hard at the Swedish pension fund that had dragged the former Activision Blizzard CEO into court. It didn't matter. According to Reuters, Microsoft has agreed to pay $250 million to settle the whole thing, wrapping up one of the messiest legal footnotes to the biggest acquisition in gaming history.

The lawsuit was filed in 2022 by Sjunde AP-Fonden (AP7), a Swedish pension fund managing retirement savings for millions of workers. AP7's argument was straightforward: Kotick rushed the sale to Microsoft at $95 per share while Activision's stock was depressed by sexual harassment and misconduct allegations, locking shareholders into a price well below what the company was actually worth. The pension fund claimed Kotick did this to protect his own position and secure roughly $400 million in change-of-control benefits. Microsoft's total purchase price for Activision Blizzard came to $75.4 billion, and AP7 believed shareholders deserved more of it.

A judge in Delaware's Court of Chancery allowed the case to proceed against Kotick and other board members last October, though she rejected the claim that Microsoft had colluded with Activision's leadership to suppress the deal price. That ruling is when things got weird. Kotick, now represented by high-profile attorney Alex Spiro, fired back with a countersuit alleging that the whole lawsuit was orchestrated by Embracer Group, the Swedish publisher infamous for its acquisition-and-closure spree. As Game File reported earlier this year, Kotick's filing claimed AP7's vice chairman had ties to Embracer and that the litigation was designed to hobble Activision competitively. Embracer denied any coordination.

$250M to Walk Away

The settlement, reported by Bloomberg Law, resolves all claims and counterclaims from every party involved. No one admits wrongdoing. The $250 million works out to roughly 30 cents per share for former Activision Blizzard shareholders who held stock between January 2022 and the deal's completion in October 2023. Court approval is still required before any money changes hands.

I find it telling that Microsoft chose to write this check rather than let the case play out. $250 million is not a rounding error, even for a company that spent $75.4 billion on the acquisition itself. It's more than the entire $54 million settlement Activision Blizzard paid in 2023 to resolve California's workplace discrimination lawsuit. Microsoft clearly decided the cost of continued litigation, both financial and reputational, was worse than the payout. And Kotick's Embracer conspiracy theory, whatever its merits, apparently wasn't enough to keep fighting over.

The settlement included language stating that no court or independent investigation had substantiated allegations of systemic or widespread sexual harassment at Activision Blizzard, or that senior executives ignored or condoned such a culture. That phrasing does a lot of heavy lifting. "Not substantiated by a court" is a very specific legal distinction, and it's the kind of sentence that gets negotiated word by word. It doesn't mean nothing happened; it means no court ruled that it did. There's a gap between those two things, and the $54 million California settlement sits right in the middle of it.

Three years after the Activision Blizzard acquisition closed, Microsoft is still paying to clean up the fallout. The FTC challenge, the UK's Competition and Markets Authority forcing a cloud gaming divestiture to Ubisoft, and now a quarter-billion-dollar shareholder settlement. The deal reshaped the entire industry, giving Microsoft control of Call of Duty, World of Warcraft, and dozens of other franchises. But the price tag keeps climbing past $75.4 billion, and this $250 million is just the latest line item on a receipt that refuses to stop printing.