World Bank president slams Microsoft over Activision Blizzard deal

On Tuesday, Microsoft announced it was buying Activision Blizzard for $68.7 billion. The deal sent shockwaves through the gaming industry and the stock market. For example, Sony’s market value dropped by around $20 billion a day after the news broke. Even the World Bank had to share its opinion on the massive deal, in a somewhat unorthodox move.

According to a Reuters report, World Bank President David Malpass criticized Microsoft’s takeover of Activision Blizzard as a “questionable allocation of capital at a time when poor countries struggle to restructure their debts, struggle against COVID-19 and poverty”. Malpass said the following during an online event.

You have to ask yourself, ‘Wait a minute, is this the best capital allocation?’ It goes to the bond market. You know, a huge amount of capital flows goes into the bond market. Very little of the developing world has access to this bond financing, while too much capital remains bottled up in advanced countries, especially in central bank reserve assets used to support long-term bond purchases. In order to cope with the influx of refugees, this ongoing malnutrition, and so on, there needs to be more money and more growth in developing countries.

Malpass criticized the financial structure of developed countries, but did not denounce countries that do not contribute enough to the World Bank. Keep in mind that it is not Microsoft’s responsibility to donate to the World Bank.

Based on the entire conversation, it seems like Malpass wants companies like Microsoft to invest in the developing world instead of spending tens of billions acquiring other companies.

What do you think of the Malpass comparison? Let us know in the comments below.