Kotick was controversial at Activision Blizzard even if he made the company a success.  In July 2021, the California Department of Fair Employment and Housing sued Activision Blizzard due to claims of sexual harassment and discrimination. Activision Blizzard denied the charges were false, and there was no evidence of systemic problems at the company. The allegations tainted the company’s reputation and had long-reaching consequences.

The Communications Workers of America, which was long unsuccessful in organising game workers, succeeded in unionising multiple departments at Activision Blizzard. In November 2021, an article in the Wall Street Journal alleged that Kotick was aware of past allegations of harassment and protected one employee, accused of sexual harassment, from being fired. Kotick denied that allegation and others related to the sexual harassment case.

But it started to look to shareholders and partners like Kotick was a liability. Sony and Microsoft said they were evaluating their relationships with Activision Blizzard, and the company’s stock price fell. Microsoft negotiated a deal to acquire Activision Blizzard in January 2022, and Kotick was expected to transition out of the CEO role.

For his part, Kotick said big changes coming from AI and Microsoft’s wealth of AI expertise was a major reason why the company decided to sell itself.

Microsoft has not appointed a direct replacement and instead has given the keys to the executive drinks cabinet to Microsoft's game content and studios president Matt Booty. He will be in charge of Activision Blizzard executives including Blizzard president Mike Ybarra, Activision publishing president Rob Kostich, and Activision Blizzard vice chair Thomas Tippl.

Booty oversees Bethesda and ZeniMax studios and Xbox Game Studios.

Microsoft is largely keeping the leadership team of Activision Blizzard in place, with some executive-level exceptions. Activision Blizzard's chief communications officer, Lulu Meservey, will leave the company at the end of January. Humam Sakhnini (vice chairman, Blizzard and King) will depart at the end of December.

Several Activision Blizzard executives will depart in March, too. Brian Bulatao (chief administrative officer), Julie Hodges (chief people officer), Armin Zerza (chief financial officer), and Grant Dixton (chief legal officer) are all reporting to their Microsoft Gaming equivalents.

While Thomas Tippl (vice chairman, Activision Blizzard) is reporting to Matt Booty for now, he will depart Microsoft in March alongside other Activision Blizzard executives.

Additionally, a memo from Matt Booty announced some of the changes taking place at ZeniMax and Bethesda, including that Jill Braff had been named the new head of those studios. Braff worked on the integration team when ZeniMax and Bethesda joined Xbox in 2021 and will lead the studios' development teams.