Will Microsoft’s acquisition of Activision Blizzard finally bring scrutiny on the video game industry?

The video game industry is bigger than the film and music industries combined – yet has faced far less scrutiny than major tech companies like Facebook and Google

Microsoft recently announced plans to purchase Activision Blizzard – one of the world’s largest video game companies – for nearly $70bn, making it the biggest acquisition in tech to date. While big tech always seems to be facing some sort of – usually well-deserved – public criticism lately, the ire has mostly focused on social media. Facebook, YouTube and Twitter executives have all had to testify before Congress about their platforms’ roles in spreading misinformation and being used as organizing tools for events like the January 6 storming of the US Capitol. This is all on top of a history of alleged labor violations, including complaints that traumatized content moderators are paid poverty wages and reports that Black employees face racial discrimination.

Related: Monopoly money: is Microsoft’s acquisition of Activision Blizzard good for gaming?

Video game companies mirror many of the alleged problems of social media yet have long evaded accountability, outside of the occasional attempt to ban a violent video game. This is troubling given the staggering size of the game industry, which produces more revenue than the film and music industries combined and whose biggest hits make more money in days than most entire franchises make in their lifetimes.

A series of recent controversies at Activision Blizzard highlights everything wrong with the industry. The latest round of shame began with a 2021 lawsuit filed by the California department of fair employment and housing. The suit alleged that women across the company were “assigned to lower paid and lower opportunity levels” and received lower salaries than male employees for similar work. The suit also alleged a “frat boy” workplace culture in which men got drunk at work and crawled into women’s cubicles to harass them. One woman killed herself on a business trip with a supervisor who brought sex toys and lubricant with him.

In early December, workers at Raven Software staged walkouts to protest what they said were the arbitrary firings of a dozen contractors. The next day at least 200 employees at Raven’s parent company, Activision Blizzard, replicated the protest. In response to the pressure, Activision Blizzard agreed to give contractors modest pay raises and paid holidays. This is all despite net earnings of $2bn the previous quarter and one of their games making the company an estimated $5m a day in revenue alone.

In 2019, Activision Blizzard fired 800 workers, roughly 8% of its entire workforce, despite record net revenue the year prior. November 2021 saw rebellions from both employees and shareholders after a Wall Street Journal investigation found that Activision Blizzard’s CEO, Bobby Kotick, was aware of and failed to respond to a large number of sexual misconduct allegations, including rape, in the company. The Wall Street Journal also detailed “misconduct allegations against Mr Kotick, including [that] he threatened in a voicemail to have an assistant killed”.

These are hardly isolated incidents within the industry. In 2019, over a hundred workers at Riot Games, a prominent video game company, walked out to protest an alleged environment of hostility and sexual harassment. In 2020, women began posting on Twitter about harassment, discrimination and sexual assault at video game industry companies and events; one organizer maintained a record of these stories, which have grown to a few hundred. Ubisoft, the makers of Assassin’s Creed, saw a wave of resignations and firings following stories of abuse, harassment, and the normalization of sexism and overwork within their offices. In 2021, a report by the International Game Developers Association found that 71% of survey participants “perceived inequity towards others based on gender, age, ethnicity, ability, or sexual orientation”.

That same survey found that roughly a third of participants had experienced “crunch”. Crunch refers to long, often uncompensated, overtime that results in employees and contractors working between 65 and 80 hours a week. A 2019 investigation by Polygon alleged a culture of fear at Epic Games, the creator of Fortnite, where some employees reportedly worked 100 hours a week.

The behavior of these companies is exacerbated by the same growing monopolization afflicting social media. There seem to be fewer and fewer mid-sized video game companies, while larger companies expand and swallow competition. Activision Blizzard itself is a merger of two video game giants. Last year Microsoft’s game division, Xbox, acquired another major player, ZeniMax Media, the parent company of the developers of the Elder Scrolls games.

This wave of consolidation, Bloomberg News reports, could “eventually lead to creative stagnation and other symptoms of monopolization, like limited choices and higher prices”. Electronic Arts, the owner of the Madden franchise, is a great example. The company is only able to put out such terrible football games each year because it used its wealth to maintain an exclusive contract with the league, putting any current and potential rivals out of business.

Steam, by far the largest online store for PC games, has a chokehold on the market. By 2013, Steam had acquired 75% of the global market for digital PC games. This near monopoly has enabled Steam to get away with the same kind of laissez-faire moderation that allowed white supremacists to fester on Facebook. An Anti-Defamation League investigation found hundreds of neo-Nazi Steam accounts, and many posts directly referencing the Holocaust and celebrating famous fascists and mass killers. Despite Steam’s market domination, it reportedly has a tiny paid moderation team supplemented by 13 volunteer moderators.

The video game industry may not yet have the same power as the leading tech juggernauts, but the industry is not to be ignored – especially considering that other titans such as Amazon, Facebook (Meta) and Google (Alphabet) have recently begun moving into the space.

There is another world in which video game employees are treated with respect and dignity, those who create the games we love have control over their workplaces and the products they make, and consumers play comfortably without the presence of Nazis. Until that day comes, the industry must be as scrutinized as its more dominant siblings in tech, and it must be regulated and dismantled before it becomes a new kind of vile.

• Akin Olla is a contributing opinion writer at the Guardian