Activision Blizzard CEO Bobby Kotick told senior managers he would consider stepping down if he fails to quickly fix culture problems at the company.
Kotick knew for years about claims of sexual misconduct at his company, the WSJ reported last week.
This prompted some employees at the company to stage a walkout last Tuesday.
The Chief Executive Officer of Activision Blizzard Inc Bobby Kotick has told senior managers at the company that he would consider stepping down if he fails to quickly fix the culture problems at the company, the Wall Street Journal reported on Sunday, quoting people familiar with his comments.
In a meeting on Friday with executives of the video game publisher’s Blizzard Entertainment unit, Kotick stopped short of saying he would step down, but left it open if misconduct issues at the company weren’t fixed quickly, the people quoted told WSJ.
Activision Blizzard did not respond to a Reuters request for comment outside business hours.
The move comes after some employees at the company staged a walkout last Tuesday after a Wall Street Journal report stated that Kotick knew about allegations of sexual harassment and assault earlier than previously reported.
The comments on Friday by Kotick were part of a series of internal meetings across Activision last week, in which he and other members of the leadership team met with employees to reaffirm their commitment to a healthy workplace, the Journal reported quoting people familiar with the meetings.
Kotick held meetings last week with senior leaders from two of Activision’s units, Activision Publishing and Blizzard Entertainment, WSJ reported, adding top executives of Activision Publishing relayed to Kotick in an online meeting that some employees would not be satisfied unless he stepped down.
Activision has been facing mounting pressure in recent months of allegations from employees of equal pay violations, sexual discrimination and sexual misconduct. The company said it had fired more than 20 employees following allegations of sexual harassment and discrimination last month.
The allegations at the company have also led to delays in launch of products and exit of top executives.
Activision CEO Bobby Kotick at the annual Allen & Company Sun Valley Conference on July 10, 2019 in Sun Valley, Idaho.
Drew Angerer/Getty Images
Activision CEO Bobby Kotick knew for years about claims of sexual harassment and rape at his company, the WSJ reports.
In at least one case, Kotick is said to have intervened to keep a studio head who was accused of harassment.
Activision said the investigation “presents a misleading view of Activision Blizzard and our CEO.”
Activision’s longtime CEO Bobby Kotick reportedly knew for years about a variety of claims of sexual harassment and rape at his company.
A huge new investigation by the Wall Street Journal details several specific examples of harassment and rape at Activision. Kotick was not only aware of those claims but, in a least one instance, reportedly intervened to keep a male staffer who was accused of sexual harassment despite the company’s human resources department recommending he be fired.
In one instance, a female employee at Activision subsidiary Sledgehammer Games (which works on the “Call of Duty” franchise) said she was raped twice by her male supervisor, in 2016 and in 2017. She reported this to the company’s HR department, which she said took no action, before retaining a lawyer. Activision settled the case out of court, and Kotick didn’t tell the company’s board, according to the Journal.
In another instance, Dan Bunting, the head of the Activision-owned studio Treyarch, was accused of harassing a female employee, and Activision’s HR department recommended that he be let go. Instead, Kotick stepped in, and Bunting was “given counseling and allowed to remain at the company,” according to the report.
After Activision was asked about the incident by the Journal, Bunting left Treyarch.
In a statement, Activision disputed the Wall Street Journal’s reporting:
“We are disappointed in the Wall Street Journal’s report, which presents a misleading view of Activision Blizzard and our CEO. Instances of sexual misconduct that were brought to his attention were acted upon. The WSJ ignores important changes underway to make this the industry’s most welcoming and inclusive workplace and it fails to account for the efforts of thousands of employees who work hard every day to live up to their – and our – values. The constant desire to be better has always set this company apart. Which is why, at Mr. Kotick’s direction, we have made significant improvements, including a zero-tolerance policy for inappropriate conduct. And it is why we are moving forward with unwavering focus, speed, and resources to continue increasing diversity across our company and industry and to ensure that every employee comes to work feeling valued, safe, respected, and inspired. We will not stop until we have the best workplace for our team.”
In response to the report, an Activision employee group said it was staging a walkout and demanded that Kotick “be replaced as CEO.”
Meanwhile, a statement from Activision’s board of directors reaffirmed its commitment to Kotick.
“The Board remains confident that Bobby Kotick appropriately addressed workplace issues brought to his attention,” the statement said. “The goals we have set for ourselves are both critical and ambitious. The Board remains confident in Bobby Kotick’s leadership, commitment and ability to achieve these goals.”
The new report comes after the State of California sued the company this summer over allegations that female Activision employees face “constant sexual harassment,” from “having to continually fend off unwanted sexual comments” to “being groped.” When employees report issues to human resources and management, the lawsuit claimed, no action is taken.
The suit — filed on July 20 to the Los Angeles Supreme Court — followed a two-year investigation conducted by California’s Department of Fair Employment and Housing. It claims “Call of Duty” maker Activision fosters a “pervasive frat boy” culture where women are paid less for the same jobs that men perform, regularly face sexual harassment, and are targeted for reporting issues.
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Activision fell 7% on Tuesday after a WSJ report alleged CEO Bobby Kotick knew of sexual misconduct allegations for years.
Kotick allegedly didn’t inform the board of directors of some reports, including alleged rapes.
Hundreds of Activision employees staged a walk out on Tuesday in response to the report.
Activision Blizzard fell as much as 7% on Tuesday after a report from The Wall Street Journal alleged that CEO Bobby Kotick knew of sexual misconduct allegations for years and didn’t inform the board of some issues, which included alleged rapes.
Internal Activision documents show that Kotick “knew about allegations of employee misconduct in many parts of the company. He didn’t inform the board of directors about everything he knew…even after regulators began investigating the incidents in 2018,” the report said.
The Securities and Exchange Commission has subpoenaed Kotick over how Activision handled reports of misconduct and disclosed them to the public. That could pose a problem for the company if it’s found that Kotick withheld certain information from investors that should have been disclosed.
The Wall Street Journal report comes just a few months after the video-game developer was sued by California for workplace discrimination and fostering a “fray boy” culture that resulted in years of sexual harassment for female employees.
In late September, Activision reached an $18 million settlement with California, though concerns of potential ethics violations surrounding the case mean it is still ongoing.
Activision employees aren’t happy with management and have expressed their frustrations with a walkout in recent months. More than 200 Activision employees staged another virtual and physical walkout on Tuesday in response to The Wall Street Journal’s new report.
Some Activision employees want Kotick to resign, and are also calling for an independent review of the company.
For now, that seems unlikely given Activision’s board of directors responded to The Wall Street Journal’s report with a statement in support of Kotick.
“The Board remains confident that Bobby Kotick appropriately addressed workplace issues brought to his attention,” the statement said.
While the board remains confident in Kotick, investors have been spooked by the reports of misconduct, with Activision Blizzard shedding about $20 billion in market value since it was sued by California in July.
Shares of Activision Blizzard are down 28% year-to-date, leading the decline among its video game peers Take-Two Interactive and Electronic Arts, which are down 14% and 3% over the same time period, respectively.
Activision CEO Bobby Kotick. Blizzard is a subsidiary of Activision.
Activision Blizzard CEO Bobby Kotick
The game company behind “Call of Duty” and “Diablo” is being sued by the state of California.
A two-year investigation into the company found a pervasive “frat boy” culture.
Amid the investigation, a major annual fan event named “BlizzCon” has been cancelled.
“Call of Duty” publisher Activision is cancelling its annual BlizzCon fan event next February amid ongoing sexual harassment and misconduct investigations.
“We’ve decided to take a step back and pause on planning the previously announced BlizzConline event scheduled for early next year. This was a tough decision for all of us to make, but it’s the right one,” the company said in a blog post. “Whatever the event looks like in the future, we also need to ensure that it feels as safe, welcoming, and inclusive as possible.”
Activision, which is the parent company of “World of Warcraft” and “Overwatch” maker Blizzard Entertainment, is being sued by the state of California for fostering a “pervasive frat boy” culture where women are paid less for the same jobs that men perform, regularly face sexual harassment, and are targeted for reporting issues, the suit said.
Many of the accusations in the suit focus on Blizzard Entertainment, and some of the misconduct described by current and former employees is said to have happened at prior years of BlizzCon.
The event, held annually in California, has drawn tens of thousands of Blizzard fans together for several days of game reveals, exclusive opportunities to play unreleased games, and panels with Blizzard’s game makers.
It has been seen as a chance for uber-fans of Blizzard’s wildly popular games to get together, cosplay as their favorite characters, and directly interact with the people who make the games they love. It was also, according to a Bloomberg report from August, an opportunity for Blizzard’s “rock star” male developers to potentially turn their fans into sexual partners.
“They will wrangle up the cosplayers or the girls or whoever they see at BlizzCon,” Christina Mikkonen, a six-year veteran of Blizzard who left in 2019, told Bloomberg.
In the weeks following the announcement of the lawsuit, Activision employees staged a walkout and demanded changes at the company. Dozens of employees have since been let go, Activision said.
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With over 200 million paid subscribers worldwide, Netflix is an absolute behemoth.
The streaming entertainment giant has successfully transitioned from a scrappy startup paying to license its content to a major player in Hollywood, splashing out tens of millions of dollars on its own productions.
So, what’s next for Netflix? The answer to that question, at least in part, appears to be video games.
Netflix is fishing around for a gaming executive to help it expand out its gaming initiative, . While the company has acknowledged an interest in interactive entertainment, it has yet to decide what this will mean in practice. Licensing content from existing game makers? Making its own games? And how will you actually play those games?
While we still don’t know much about Netflix’s plans, one thing is clear right now: Netflix getting involved in gaming is almost certain to fail.
“I do think they will try, and do think they will fail,” Wedbush managing director Michael Pachter told Insider. “It’s hard to make games.”
“Black Mirror: Bandersnatch” is an “interactive movie” on Netflix that is more choose-your-own-adventure than video game.
Netflix
Indeed, the video game industry is a very risky business, and even entrenched studios with top-tier talent and years of experience regularly go under. “We have the failures of THQ, Midway, Acclaim, 3DO, BAM, Eidos, Atari, Infogrames, Interplay, and probably a few others to illustrate how hard it is,” Pachter said. “I don’t see how Netflix could possibly think it can develop and sell games.”
Joost van Dreunen, author of “One Up: Creativity, Competition, and the Global Business of Video Games,” echoed Pachter’s skepticism.
“Big tech sucks at games,” he told Insider.
He pointed to Google’s Stadia, Amazon’s Luna, and Facebook’s scattershot gaming efforts across the last decade as prime examples of how major tech companies routinely fail at gaming initiatives.
Google and Amazon and Facebook have poured hundreds of millions of dollars into gaming across the last decade, yet none are major players in the video game market. “They look at it in a way that distribution goes before the content,” Van Dreunen said, “and that’s the wrong way around.”
Instead of creating video games and building beloved brands, they’ve largely focused on the mechanics of how you buy and access those games: Google’s Stadia platform, a Netflix-like video game streaming service, is a prime example.
Less than two years after Google announced a major game development initiative led by “Assassin’s Creed” creator Jade Raymond, and less than one year after outright buying a video game studio, the company folded those efforts this past February.
What’s Google focusing on for its big gaming service rather than making games for it?
An “increased focus on using our technology platform for industry partners,” Google Stadia Vice President Phil Harrison said in a blog post – a pretty huge step back from the splashy announcement of Stadia back in 2019, which promised a new digital service that would compete against the likes of Nintendo, Sony’s PlayStation, and Microsoft’s Xbox.
Google VP Phil Harrison speaks during a Google keynote address announcing Google Stadia at the Game Developers Conference in San Francisco, March 2019.
Reuters
For Netflix, which has the benefit of owning a beloved intellectual property like “Stranger Things” that could lend itself to games, another problem exists.
“Building games from owned IP is also super hard,” Pachter said. “Disney has failed at least three times trying to do so, and its IP is much stronger than Netflix.”
In recent years, Disney’s biggest properties – from Marvel characters to the “Star Wars” franchise – have found success in gaming by Disney largely handing over creative control to major video game companies.
Examples include 2018’s “Marvel’s Spider-Man” and 2019’s “Star Wars Jedi: Fallen Order.” The former, a PlayStation 4 exclusive game made by Insomniac Games, sold over 20 million copies. The latter, a multiplatform “Star Wars” game with original characters and story, sold over 10 million copies.
At approximately $60 apiece, each game has grossed well over $1 billion in sales.
2018’s “Marvel’s Spider-Man” for the PlayStation 4.
Sony/Marvel
Netflix could follow a similar model and potentially find success.
The company could build a wildly successful game streaming service that seamlessly leverages its existing streaming service. It could spend years, and hundreds of millions of dollars, building its IP into major game franchises.
Or it could buy its way in, splashing out billions of dollars on a major game publisher like EA or Ubisoft – akin to Amazon’s recent purchase of MGM Studios, but for gaming. That would require a major, long-term institutional buy-in from Netflix, in addition to major financial investments.
“You need to have the stomach,” Van Dreunen said. “Like when you look at Google and Amazon – they just don’t have internally the numbers or the understanding of the space to say, ‘Yeah, you know what we should do? Spend $10 billion to really break in.'”
For its part, Netflix hasn’t detailed its gaming plans just yet – but the company is acknowledging the reported interest in a larger gaming investment in the future.
“Our members value the variety and quality of our content,” the company said in a statement. “Members also enjoy engaging more directly with stories they love – through interactive shows like ‘Bandersnatch’ and ‘You v. Wild,’ or games based on ‘Stranger Things,’ ‘La Casa de Papel’ and ‘To All the Boys.’ So we’re excited to do more with interactive entertainment.”
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