BRO CULTURE IS RAPE CULTURE

Facing a "challenging time", Activision Blizzard announces formation of Workplace Responsibility Committee

The latest poorly-judged move from Activision Blizzard includes a press release pushed out in the dead of night that doesn't mention its 10,000+ employees.

News by Dom PeppiattContributor

Published on 23 Nov, 2021

Another day, another development in the messy, appalling saga that is Activision Blizzard's response to its ongoing sexual harrassment lawsuit.

Following reports that Bobby Kotick apparently discussed stepping down as Activision Blizzard boss, the company's board slipped out a press release at 10.30pm EST detailing the formation of a "Workplace Responsibility Committee".

The press release, written in dense HR-centric language, basically notes that this new committee will oversee Activision Blizzard’s progress in "successfully implementing its new policies, procedures, and commitments to improve workplace culture and eliminate all forms of harassment and discrimination at the company". You can read about some of the proposed policies here, though it's worth noting that they won't necessarily apply to Kotick himself. Hm.

The new Workplace Responsibility Committee will consist of the only two women on Activision Blizzard's 10-person board of directors (a board which has stood behind Kotick as calls for his resignation mount up), though Activision notes "a new, diverse director" will soon be added to the board, too.

"The committee will require management to develop key performance indicators and/or other means to measure progress and ensure accountability," reads the press release. "The chief executive officer, Bobby Kotick, along with the chief people officer and chief compliance officer will provide frequent progress reports to the committee, which will regularly brief the full board. The committee is empowered to retain outside consultants or advisers, including independent legal counsel, to assist in its work."

So, basically, the committee can get advice from outside sources and lawyer up, but there's no reference at all to how it can (or should) interact with the actual workforce. You know, the people making all these complaints and the reason state and federal agencies are investigating the company.

"Formation of the committee and additional future changes will help facilitate additional direct oversight and transparency and ensure that the company’s commitments to Activision Blizzard’s workforce are carried out with urgency and impact," the press release continues. "This has been a challenging time across the company, but the board is confident in the actions underway to set the company up for future success."

It's worth noting, at this point, that this press release is directed at investors – some of which have also called for Kotick's resignation.

Given that PlayStation and Xbox bosses are planning to re-evaluate their relationship with Activision Blizzard, the formation of this Committee may not be enough.

Nintendo Joins Sony And Xbox In Calling Activision Blizzard Crisis 'Disturbing'

Doug Bowser finds recent reports “distressing”

By Ryan Leston
Updated: 23 Nov 2021 

Nintendo has joined the likes of Sony and Xbox, speaking out against Activision Blizzard due to recent reports of sexual misconduct and toxicity.

In a new report by Fanbyte, Doug Bowser reportedly expressed concern over the ongoing situation at Activision Blizzard in a company-wide email, calling the allegations "distressing and disturbing."

“Along with all of you, I’ve been following the latest developments with Activision Blizzard and the ongoing reports of sexual harassment and toxicity at the company,” he explained. “I find these accounts distressing and disturbing. They run counter to my values as well as Nintendo’s beliefs, values and policies.

Activision Blizzard Lawsuit Timeline: The Story So Far

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The email reportedly goes on to explain that Nintendo is committed to providing an “open and inclusive” workplace and expects the same from the industry and its partners. Bowser also states that Nintendo has been “in contact with Activision, have taken action and are assessing others.” Although the email apparently stops short of giving further details.

However, the Nintendo chief does reportedly confirm that the company has been working with the ESA – a lobbying organization in which both Nintendo and Activision Blizzard are members. Bowser wrote that Nintendo has been working with the ESA since last week in order to “strengthen its stances on harassment and abuse in the workplace”.

“Every company in the industry must create an environment where everyone is respected and treated as equals,” the email reads. “And where all understand the consequences of not doing so.”

IGN has reached out to Nintendo of America for comment but has yet to receive a response at the time of publishing.

Xbox Boss 'Disturbed and Deeply Troubled' By Latest Activision Reports - IGN Now

Nintendo’s comments follow PlayStation CEO Jim Ryan who is said to be "disheartened and frankly stunned" by the Activision Blizzard scandal. Xbox boss Phil Spencer also added that he is “disturbed and deeply troubled” by the ongoing events.

Activision CEO Bobby Kotick has found himself under pressure to resign, and has reportedly told the company he would consider stepping down if he’s unable to quickly fix the ongoing issues at the company.

Ryan Leston is an entertainment journalist and film critic for IGN. You can follow him on Twitter.

Nintendo Of America President Joins PlayStation And Xbox Counterparts In Criticism Of Activision Blizzard

"They run counter to my values as well as Nintendo’s beliefs"

• by Liam Doolan  Yesterday, 

• 
  

Image: Nintendo

Update: Nintendo has now officially confirmed this in a PR response to Fanbyte:

“We can confirm the content of Doug Bowser’s internal email to Nintendo of America staff is accurate. We have nothing further to share on this topic.”

---

Nintendo of America's president Doug Bowser last week issued an internal response to ongoing reports about allegations of misconduct at Activision Blizzard.

Bowser's email, which has been publicly shared by Fanbyte, was sent out on 19th November and reached "all levels" of Nintendo of America - including internal development houses such as Retro Studios (Metroid Prime 4) and the recently acquired Canadian team Next Level Games (Luigi's Mansion 3).

Bowser mentioned how "distressing and disturbing" the reports were and said every company in the industry was responsible for creating an environment where everyone is treated as an equal:

“Along with all of you, I’ve been following the latest developments with Activision Blizzard and the ongoing reports of sexual harassment and toxicity at the company. I find these accounts distressing and disturbing. They run counter to my values as well as Nintendo’s beliefs, values and policies.”

“Every company in the industry must create an environment where everyone is respected and treated as equals, and where all understand the consequences of not doing so.”

His email further states how Nintendo has committed itself to an open and inclusive workplace - welcoming everyone - and expects the same from the rest of the industry and its partners.

Nintendo's representatives have apparently been “in contact with Activision, have taken action, and are assessing others." Bowser mentioned how Nintendo has been working with the ESA (a lobbying organisation Activision is also a member of) encouraging it to strengthen its stances on harassment and hold its members to the highest standard.

Both Sony and Microsoft are also reportedly re-evaluating their relationship with Activision Blizzard. You can read more in our previous stories:

• Activision Blizzard Boss Bobby Kotick Is Reportedly Open To Quitting As Abuse Claims Rock The Company
• Activision Blizzard Employees Stage A Walkout Calling For CEO Bobby Kotick's Resignation

Activision Illegally Threatened Staff, Labor Officials Find

Josh Eidelson
Mon, May 23, 2022


(Bloomberg) -- US labor board prosecutors determined that Activision Blizzard Inc. illegally threatened staff and enforced a social media policy that conflicts with workers’ collective action rights, according to a government spokesperson. The finding is a setback for the company as it tries to fend off a unionization effort and finalize a $68.7 billion sale to Microsoft Corp.

Unless Activision settles, the Los Angeles-based regional director of the National Labor Relations Board will issue a complaint, the agency’s press secretary Kayla Blado said Monday. The NLRB enforces the National Labor Relations Act, the New Deal law establishing workers’ collective action and organizing rights.

Activision denied wrongdoing. “These allegations are false,” company spokesperson Jessica Taylor said in an emailed statement. “Employees may and do talk freely about these workplace issues without retaliation, and our social media policy expressly incorporates employees’ NLRA rights.”

The labor board is slated to count ballots on Monday from an election held among around 21 employees at Activision’s Raven studio in Wisconsin, which could establish a rare foothold for organized labor in the video game industry.

The allegations in the labor board case were brought to the agency last September by the Communications Workers of America, the same union organizing at Raven. CWA, which has increasingly focused in recent years on organizing non-union workers in the tech and video game industries, said in an emailed statement at the time that it was “very inspired by the bravery” of Activision employees and that it filed with the agency to ensure that violations by the company “will not go unanswered.” In an emailed statement Monday, CWA’s organizing director Tom Smith said the labor officials’ finding underscored the need for Activision’s CEO to change course: “In order to rebuild trust at Activision, Bobby Kotick needs to take the high road and start listening to workers instead of doing everything possible - including breaking the law - to silence them.”

Activision, the games-entertainment behemoth behind Call of Duty, has had a tumultuous year. It was hit last summer with an explosive complaint from California’s Department of Fair Employment and Housing, accusing the company of fostering a “bro culture” of sexism. Activision’s chief compliance officer, who served as Homeland Security adviser to President George W. Bush, called those claims “factually incorrect, old and out of context.” Workers there moved to unionize after news of job cuts in December 2021, which preceded weeks of strikes. In January, Activision agreed to the deal with Microsoft.

Complaints issued by labor board regional directors are considered by agency judges, whose rulings can be appealed to NLRB members in Washington, D.C., and from there to federal court. The agency can require remedies such as posting of notices and reversals of policies or punishments but has no authority to impose punitive damages. Jennifer Abruzzo, the labor board’s general counsel appointed by President Joe Biden, takes a much broader view of workers’ legal rights than her Trump-appointed predecessor. She has signaled she’ll seek to establish new precedents on numerous issues, including how much companies can restrict employees’ social media posts.

UPDATE 2-Videogame publisher Activision illegally threatened staff, U.S. agency says


Mon, May 23, 2022, 
By Kanishka Singh and Daniel Wiessner

WASHINGTON, May 23 (Reuters) - Videogame publisher Activision Blizzard Inc enforced a social media policy that conflicted with workers’ rights and illegally threatened staff in the policy's enforcement, a U.S. government agency said on Monday.

Unless Activision settles, the Los Angeles-based regional director of the National Labor Relations Board (NLRB) will issue a complaint, a spokesperson of the NLRB said in a statement.

The NLRB had been looking into allegations brought to the agency last September by labor union Communications Workers of America (CWA).

The announcement came on the same day that a small group of Activision employees at a Wisconsin studio that works on the popular "Call of Duty" franchise voted to join the CWA.

The union has increasingly focused in recent years on organizing non-union workers in the tech and video game industries.

The "Call of Duty" videogame maker said on Monday the allegations were false.

"These allegations are false. Employees may and do talk freely about these workplace issues without retaliation, and our social media policy expressly incorporates employees' NLRA rights," a company spokesperson said.

"Our social media policy explicitly says that it ‘does not restrict employees from engaging in the communication of information protected by law, including for example, rights of employees in the United States protected by the National Labor Relations Act,'" the spokesperson said.

In recent months, Activision Blizzard workers have banded together to try to influence the company's future, including staging a walkout and circulating a petition calling for the removal of Chief Executive Officer Bobby Kotick. Microsoft Corp announced plans to acquire Activision in January.

The company's labor issues come as it also faces claims from a California civil rights agency of widespread discrimination against female employees. Activision has denied wrongdoing and said the agency did not thoroughly investigate workers' discrimination complaints before suing.

Activision had faced similar claims from the U.S. Equal Employment Opportunity Commission, which it settled in March for $18 million.

(Reporting by Kanishka Singh in Washington and Daniel Wiessner in New York; Editing by Lisa Shumaker)

NLRB accuses Activision Blizzard of violating labor law by threatening employees

Kris Holt
·Contributing Reporter
Mon, May 23, 2022

Mike Blake / reuters


A regional director for the National Labor Relations Board has determined there's "merit to the allegations" that Activision Blizzard violated the National Labor Relations Act. It says there are indications the company and its subsidiaries Blizzard Entertainment and Activision Publishing maintained an "overbroad social media policy" and that Blizzard threatened employees who were exercising their right to organize. The findings were first reported by Bloomberg and confirmed to Engadget.

“These allegations are false. Employees may and do talk freely about these workplace issues without retaliation, and our social media policy expressly incorporates employees’ NLRA rights," an Activision Blizzard spokesperson told Engadget in a statement. "Our social media policy explicitly says that it ‘does not restrict employees from engaging in the communication of information protected by law, including for example, rights of employees in the United States protected by the National Labor Relations Act.’”

If the company does not settle the case, the NLRB's Los Angeles office will file a complaint. That will lead to a hearing in front of an NLRB Administrative Law Judge (unless a settlement is reached in the meantime).

While the agency can't impose punitive measures against a defendant, it can require them to reverse punishments or policies; reinstate fired workers and provide backpay; or post notices containing promises not to break the law. An NLRB regional director can petition a district court for a temporary injunction if workers' rights have been violated. The agency can also file cases in federal court.

The allegations were made in September by the Communications Workers of America (CWA). It accused Activision Blizzard in an Unfair Labor Practice filing of telling employees they can't discuss wages, hours or working conditions; enforcing an "an overly broad social media policy" against workers who "engaged in protected concerted activity" (i.e. their right to organize or discuss unionization); and threatening or suveilling such employees.

The news comes on the same day that votes will be counted in a Raven Software union election. Quality assurance workers at the Activision Blizzard studio, who are organizing with the CWA as the Game Workers Alliance, got the go-ahead from the NLRB to hold a vote. If they're successful, the group of 21 or so workers will form the first union at a AAA game publisher in North America, despite the company's reported attempts to stymie their efforts.

Activision Blizzard's labor practices came under intense scrutiny last July when California’s Department of Fair Employment and Housing accused it in a lawsuit of fostering a "frat boy" culture where sexual harassment and discrimination were present. Other suits have been filed against the company since, including a wrongful death case.

In the wake of the initial suit, Activision Blizzard workers formed an employee advocacy group called A Better ABK. They used social media to organize and share their concerns and demands publicly.

The company is the subject of a proposed $68.7 billion takeover by Microsoft. Its shareholders voted in favor of the deal last month, but regulatory approval is still required.

Update 5/23 3:10PM ET: Added Activision Blizzard's statement.

MONOPOLY CAPITALI$M

Microsoft spent two years trying to buy Activision Blizzard. For Xbox CEO, that was the easy part

by Matt O'brien

Xbox CEO Phil Spencer arrives at the Phillip Burton Federal Building and U.S. Courthouse on June 28, 2023 in San Francisco. After two years co-piloting the biggest acquisition in video game history past an onslaught of challenges, Spencer now moves on to his next quest: making Microsoft's takeover of Activision Blizzard worth the hassle. 

Credit: AP Photo/Noah Berger, File

After two years co-piloting the biggest acquisition in video game history past an onslaught of challenges, Xbox CEO Phil Spencer now moves on to his next quest: making Microsoft's takeover of Activision Blizzard worth the hassle.

Microsoft, which owns the Xbox gaming system, closed its $69 billion deal to buy game-maker Activision Blizzard on Friday after fending off global opposition from antitrust regulators and rivals.

It marks a career-defining moment for Spencer, who first joined Microsoft as an intern in 1988 and has helmed Xbox since 2014. After years of lagging behind rival Sony's PlayStation, acquiring Activision's collection of popular game titles gives Microsoft a rare chance to catch up.

"His job really just starts today," said analyst Gil Luria, technology strategist at D.A. Davidson, after the deal's closure. "All he's been doing is preparing for today where he actually gets to integrate the business."

And it marks the end of an era for Activision Blizzard CEO Bobby Kotick, who's led the Southern California maker of Call of Duty and other blockbuster franchises since 1991 after helping to buy it from bankruptcy. Kotick said he's assisting with the transition until the end of the year.

Activision Blizzard was still reeling from worker protests, lawsuits and government investigations over allegations of workplace harassment against women and unequal pay when Microsoft privately reached out about buying the company in 2021.
Activision Blizzard CEO Bobby Kotick leaves the Phillip Burton Federal Building and U.S. Courthouse in San Francisco on June 28, 2023. Microsoft, which owns the Xbox gaming system, closed its $69 billion deal to buy game-maker Activision Blizzard on Friday. It marks the end of an era for Kotick, who's led the Southern California maker of Call of Duty since 1991. Credit: AP Photo/Noah Berger, File

When the companies announced a planned merger in January 2022, Microsoft CEO Satya Nadella made clear it would be "critical for Activision Blizzard to drive forward" on its commitments to improve its workplace culture.

That was just the start of Microsoft's challenges in bringing home the deal. After negotiations with Spencer faltered, top rival Sony brought its concerns about losing access to the Call of Duty franchise to regulators around the world. The strongest opposition came from U.S. antitrust enforcers emboldened by President Joe Biden's administration to take a tougher look at big tech deals, as well as their counterparts in the United Kingdom who finally relented in approving the deal Friday only after Microsoft agreed to make concessions.

"Microsoft didn't have a choice. If they wanted to be long-term competitive with Sony and the PlayStation platform, they need to have a much more robust content offering," Luria said.

An image from Activision's Call of Duty is shown on a smartphone near a photograph of the Microsoft logo in this photo taken in New York, June 15, 2023. Microsoft’s purchase of video game maker Activision Blizzard won final approval Friday, Oct. 13, from Britain’s competition watchdog, reversing its earlier decision to block the $69 billion deal and removing a last obstacle for one of the largest tech transactions in history. Credit: AP Photo/Peter Morgan, File



But, "in retrospect, they should have read the writing on the wall in terms of the difficulty of closing the deal," Luria said. "They needed to do the deal to stay competitive, but knowing what they know now, they might have done it differently."

A key moment came in June, when a federal judge weighed the U.S. Federal Trade Commission's attempt to block the merger while it awaited further review. In an unusual move for a CEO that telegraphed the deal's importance, Spencer spent the better part of two weeks at the defendant table of a San Francisco courtroom conferring with Microsoft's lawyers. The judge eventually dismissed the FTC's request, though the agency is still seeking to unwind the deal.

Microsoft's success in integrating Activision's business is "not guaranteed, especially as its track record with acquisitions has been a mixed bag," said George Jijiashvili, senior principal analyst at research and advisory firm Omdia. Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, maker of Elder Scrolls and Fallout.

Scenes from "Candy Crush Saga," left, by Activision Blizzard, and "Crash Team Rumble," from Activision Publishing, are shown in this photo, in New York, Wednesday, June 21, 2023. Microsoft’s purchase of video game maker Activision Blizzard won final approval Friday, Oct. 13, from Britain’s competition watchdog, reversing its earlier decision to block the $69 billion deal and removing a last obstacle for one of the largest tech transactions in history. Credit: AP Photo/Richard Drew

Microsoft's two key game launches this year from its Bethesda merger, Redfall and Starfield, have "been met with mixed reactions at best," Jijiashvili said. "However, with globally popular game franchises such as Call of Duty now under its wing, the company is strategically much better positioned."

Another challenge for Microsoft will be overcoming the workforce challenges that dogged Activision before the takeover.

As of late last year, Activision Blizzard had 13,000 employees, about 72% in North America, according to a regulatory filing. Microsoft has already pledged it will stay neutral if the nearly 10,000 workers in the U.S. and Canada seek to organize into a labor union, part of a 2022 agreement with the Communications Workers of America meant to address U.S. political concerns about the merger's effects.

The logo for Microsoft, and a scene from Activision "Call of Duty - Modern Warfare," are shown in this photo, in New York, June 21, 2023. Microsoft’s purchase of video game maker Activision Blizzard won final approval Friday, Oct. 13, from Britain’s competition watchdog, reversing its earlier decision to block the $69 billion deal and removing a last obstacle for one of the largest tech transactions in history. Credit: AP Photo/Richard Drew, File

A sign is seen outside the Activision building in Santa Monica, Calif. on June 21, 2023. Microsoft’s purchase of video game maker Activision Blizzard won final approval Friday, Oct. 13, from Britain’s competition watchdog, reversing its earlier decision to block the $69 billion deal and removing a last obstacle for one of the largest tech transactions in history. Credit: AP Photo/Richard Vogel, File

"It is a new day for workers at Activision Blizzard," said CWA President Claude Cummings Jr. in a statement Friday.

"Over two years ago, workers at Activision Blizzard's studios captured the country's attention through walkouts and other protests over discrimination, sexual harassment, pay inequity, and other issues they were facing on the job," Cummings Jr. said. "Their efforts to form unions were met with illegal retaliation and attempts to delay and block union elections. Now these workers are free to join our union through a fair process, without interference from management."

In a Friday welcome email to Activision employees, Spencer said he wanted to "reiterate that we hold ourselves to a high bar in delivering the most inclusive and welcoming experiences for players, creators, and employees."

© 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


Explore furtherMicrosoft agrees to keep Call of Duty on Sony Playstation after it buys Activision Blizzard

Dozens ‘exited’ Activision Blizzard over misconduct, CEO tried to keep departures quiet: report

MobileSyrup 


Thirty-seven employees have “exited” from Activision Blizzard amid the gaming publisher’s workplace misconduct scandals, according to The Wall Street Journal, citing internal documents.

A further 44 employees have been disciplined, Activision Blizzard spokesperson Helaine Klasky told the outlet.

Since last summer, the company has been facing a lawsuit from California’s Department of Fair Employment and Housing alleging years of fostering a “frat boy culture” that led to sexual harassment, unfair hiring practices and other forms of mistreatment of women.

However, given the ambiguity surrounding the word “exited,” it’s unclear exactly how many of those 37 people left voluntarily versus being pushed out. Likewise, Activision Blizzard wouldn’t specify exactly what form of disciplinary action has been taken against the 44 other employees.

Meanwhile, The Wall Street Journal reports that Activision Blizzard collected around 700 employee complaints who expressed concerns of workplace misconduct, although the company denied this to the outlet. Bobby Kotick, Activision Blizzard CEO, also reportedly shut down the release of a company report summarizing all of the above information to address the allegations. According to The Wall Street Journal, Kotick felt the report would make the company’s issues seem bigger than what has already been revealed.

Kotick himself has been the subject of immense scrutiny, especially following a November report from The Wall Street Journal alleging that he not only knew about the “frat boy culture,” but actively worked to keep it quiet. More than 1,000 Activision Blizzard employees quickly signed a petition calling for Kotick to resign, although the executive has said he would only consider doing so if the workplace issues aren’t fixed “with speed.”

Activision Blizzard is also facing a strike from dozens of developers at its Raven studio, which works on its massively popular Call of Duty: Warzone game. The workers were protesting the sudden termination of a dozen quality assurance (QA) contractors. The ABK Workers Alliance, which represents employees at Activision, Blizzard and King, has condemned the company for its “silence” over these protests.

All the while, Warzone players have been reporting numerous bugs in the game. Speaking to The Washington Post, multiple unnamed QA testers attributed these issues to the QA workers who were laid off from Raven. “You can’t just lose some of your hardest-working people and expect nothing to happen,” one of them told The Washington Post.

A GoFundMe has been set up to support the ABK Workers Alliance — you can check that out here.

Image credit: Wikimedia Commons

Source: The Wall Street Journal

Activision fired dozens over harassment allegations: WSJ

By AFP
Published January 17, 2022

Bobby Kotick, CEO of Activision Blizzard, has defended his handling of harassment complaints, as some employees staged a walkout calling for him to go - Copyright AFP Daniel ROLAND

The video game giant Activision Blizzard has fired nearly 40 employees and disciplined about 40 others since July as it deals with allegations of sexual harassment and other misconduct, The Wall Street Journal said Monday.

The newspaper, which quoted people familiar with the situation, said that over the past seven months the company has also received about 700 reports of employee concerns over sexual assault or harassment or other misconduct, in some cases separate reports about the same incident.

A summary of the personnel action that the maker of “Call of Duty,” “World of Warcraft” and other blockbuster games has taken was scheduled to be released before the winter holidays, the Journal said.

But CEO Bobby Kotick delayed the release, arguing that it would make the company’s workplace problems look even bigger than they were known to be, the paper added.

Activision Blizzard did not immediately respond to an AFP request for comment.

In July, California state regulators accused the company of condoning a culture of harassment, a toxic work environment, and inequality.

In September the Securities and Exchange Commission launched a probe into the company over “disclosures regarding employment matters and related issues.”

And two months later the Journal reported that Kotick, accused of mishandling the harassment complaints, has signaled he would consider stepping down if he failed to quicky fix the company culture. He has led the company for more than three decades.

Nearly 20 percent of Activision Blizzard’s 9,500 employees have signed a petition calling for Kotick to resign.

The Journal said the company is under pressure from shareholders and business partners for more accountability over its handling of misconduct issues.

Late last year chief operating officer Daniel Alegre pledged a 50 percent increase in female and non-binary staff over the next five years so that they will account for more than a third of Activision’s workers.

Activision Blizzard continues to remove employees amid misconduct allegations

Kris Holt 

ENDGADGET

Since July, 37 Activision Blizzard employees have been fired or forced out and another 44 have been disciplined as the company attempts to address accusations of harassment and misconduct, a spokesperson told The Wall Street Journal. In October, the company said more than 20 people had departed and at least another 20 had been disciplined.

The game publisher was supposed to share a summary of that information publicly before the holidays, according to the report. However, embattled CEO Bobby Kotick is said to have pulled the plug on that over concerns it would make Activision's woes seem even worse.

The spokesperson denied "the assertion regarding Mr. Kotick," as well as claims that employees had filed around 700 reports of misconduct and other issues since July, when Activision was sued by the California Department of Fair Employment and Housing (DFEH). The agency alleged the company fostered a "frat boy" culture where discrimination and sexual harassment were rife.

Former Blizzard president J. Allen Brack, who was accused in the DFEH suit of taking "no effective remedial measures" to mitigate sexual harassment, left the company soon after the filing. Activision Blizzard's top HR executive Jesse Meschuk has departed, as have Diablo 4 game director Luis Barriga, lead designer Jesse McCree (after whom an Overwatch character was previously named) and World of Warcraft designer Jonathan LeCraft.

In November, the WSJreported that Kotick had known about many of the worst instances of abuse for years and that he may have protected some employees who were accused of harassment. Many Activision Blizzard employees staged a walkout in the wake of the report and around 2,000 signed a petition calling for him to step down. The Activision board has issued a statement of support for Kotick.

Along with employees, state treasurers and investors (the share price has dropped by almost 30% since July) have expressed concern about the issues at hand. Several Activision Blizzard partners have condemned the company or reassessed their relationships with it too.

PlayStation, Xbox and Nintendo chiefs criticized the company in notes to their employees. Xbox head Phil Spencer said last week that Microsoft has "changed how we do certain things with" Activision, but didn't share details. Also this month, Lego postponed an Overwatch 2 set that was supposed to arrive in February while it evaluates its partnership with Activision Blizzard.

Activision Blizzard Workers Take First Steps Toward Unionizing

Jason Schreier
Fri, December 10, 2021,

(Bloomberg) -- Some employees at Activision Blizzard Inc. are taking the initial, early steps toward organizing in an industry that isn’t unionized.

In collaboration with the media labor union, Communications Workers of America, employees of the U.S.’s second-largest video game publisher are asking colleagues to sign a union authorization card, which could eventually lead to a vote across the company. Their efforts coincide with the creation of a strike fund to support hundreds of workers who have been participating in a work stoppage since Monday in protest of layoffs at one of Activision Blizzard’s studios.

Workers at Santa Monica, California-based Activision, known for games like Call of Duty and World of Warcraft, have staged three protests since July, after a California agency sued the company over allegations of sexual harassment and gender-based discrimination. Issues have snowballed since then, including an investigation by the Securities and Exchange Commission and a class-action shareholder lawsuit. Employees and the Communications Workers of America also filed an unfair labor practice complaint against the company.

Organization around the protests and a call for a strike is being initiated by the ABK Workers Alliance, which represents the employees from the company’s largest studios, Activision, Blizzard and King. The Washington Post earlier reported on the unionization efforts.

A spokesperson for ABK said the group had already gathered several hundred signatures before this move, as it has been working with the CWA and the Campaign to Organize Digital Employees for months. If the group can collect union cards from 30% of workers in any of Activision Blizzard’s business units, it will be able to call for votes within those units, the spokesperson said.

Activision workers’ biggest concern right now is having a voice in what’s happening at the company, the spokesperson said, adding that workers have been “ignored and swept aside” for months.

In an email to employees, Activision said it supports workers’ legal right to decide whether to join a union. “We ask only that you take time to consider the consequences of your signature on the binding legal document presented to you by CWA,” Activision said. “Achieving our workplace culture aspirations will best occur through active, transparent dialogue between leaders and employees that we can act upon quickly.”

Organizers slam Activision Blizzard for “union busting”


Megan Farokhmanesh
Fri, December 10, 2021

Activision Blizzard is asking employees to “take time to consider the consequences” of workers’ recent efforts to unionize, a tactic some organizers are calling "union busting."

Driving the news: Chief administrative officer Brian Bulatao sent an internal email on Friday, claiming that employees signing union cards “will have signed over to [the Communications Workers of America] the exclusive right to ‘represent [you]’...that means your ability to negotiate all your own working conditions will be turned over to CWA.”

“Achieving our workplace culture aspirations will best occur through active, transparent dialogue between leaders and employees that we can act upon quickly,” Bulatao continues.

A Better ABK organizer Jessica Gonzalez told Axios that the company’s “incompetence has been showing and continues to show with this obvious union busting intimidation tactic.”

Why it matters: Activision Blizzard’s message is a direct response to employees’ continued efforts to unionize.

Catch up quick: Employees at Call of Duty: Warzone developer Raven Software walked out earlier this week after a dozen quality assurance contractors were told their contracts would not be renewed.

Those employees have not yet returned to work and have instead entered strike territory.

One organizer estimates at least 200 people have walked out over Tuesday and Wednesday alone.

Organizers have also begun collecting union authorization cards as they work to gather the support needed to form a union.

An Activision Blizzard spokesperson told Axios that it “supports our employees’ right to express their opinions in a legal, safe, and peaceful manner, without fear of retaliation, and their NLRA rights in general.”

The other side: “It's disappointing to see Activision Blizzard management, at yet another choice point when they could have done the right thing, double down and continue to take the low road,” said CWA National Organizing Director Tom Smith in a statement to Axios.

“Union avoidance campaigns waste resources that ABK management could otherwise be using to address the serious concerns at the company such as compensating the victims of sexual harassment and discrimination.”

The big picture: Organizers say leadership rarely, if ever, acknowledges their efforts and asks.

“The fact that we're being so routinely ignored, just really speaks to the fact that our leadership doesn't care,” an organizer told Axios. “The only way to make them care is to put public pressure on them — to make them see that caring is profitable.”

“We are turning so many great people out of our companies and so many great people out of the industry with these culture issues. That stuff has a huge impact on our ability to make games.”

Two organizers at A Better ABK told Axios that Activision Blizzard would no longer compensate workers who walked out past Dec. 8.

Organizers announced a strike fund Thursday to support workers in their walkout that’s already raised more $241,000.

“We didn't want to jump straight to unionization,” an organizer told Axios, noting leadership’s lack of action as a driving force.

“We had other tools in our kit that we tried leveraging, using walkouts petitions, raising our voices internally.”

“The fact that this has gone on for so long, we really did feel the need to make sure that people were secure, especially because... we can't intermittently strike.”

A Better ABK continues to gather the necessary 30 percent support to hold an election to unionize in the wake of leadership’s unwillingness to work with them.

An organizer tells Axios that the timing of these events were coincidental to Thursday's annual show, The Game Awards.

They credit management’s lack of acknowledgment of A Better ABK’s requests, on top of the Raven walkouts, with the decision to pursue that path.

“It was felt by several people that the time was right,” they said.

“We've been getting slammed,” they added of the response to signing unions cards so far. “The service has gone down once or twice... because so many people were trying to sign up.”

Activision Blizzard Devs Announce Work Stoppage And Strike Fund

Ethan Gach
Thu, December 9, 2021

People gather outside Blizzard headquarters in Irvine, California to protest conditions at its parent company.

Employees at publishing giant Activision Blizzard, who formed the ABK Worker Alliance, have called on supporters today to donate to a strike fund. They have announced their intention to stop working, in protest of their management’s ongoing response to months of lawsuits and reports about widespread sexual harassment and discrimination across the company.

“Today, the ABK Worker’s Alliance announces the initiation of its strike,” the group wrote on Twitter. “We encourage our peers in the Game Industry to stand with us in creating lasting change.” The ABK Worker Alliance also linked to a strike fund set up on GoFundMe, where it calls on supporters to help it raise $1 million to take care of employees during the stoppage.

In the months since, we’ve seen CEO Bobby Kotick and the Board of Directors protect abusers and only hold perpetrators accountable after the events were brought to light by outside media. We’ve seen Activision hire law firm WilmerHale, known for union busting, to disrupt and impede the improvement efforts of Activision-Blizzard workers. We’ve seen Raven Software workers lured by the promise of promotion, only to be terminated shortly after relocation on top of the already underappreciated and severely underpaid working conditions of ABK workers across the company. These, and many other events have caused an alliance of Activision-Blizzard employees to initiate a work stoppage until demands are met and worker representation is finally given a place within the company.

The Washington Post’s Shannon Liao reports that the ABK Worker Alliance will also be calling on employees across Activision Blizzard to sign union authorization cards in a new massive step toward unionization.

These latest labor actions comes as quality assurance testers at Raven Software, the studio in charge of Call of Duty: Warzone, walked off the job earlier this week to protest recently announced layoffs. While 500 contractors across Activision Blizzard would be converted to full-time, the company said 20 would be terminated near the end of January, a move Raven developers said would hurt Warzone’s ongoing development and maintenance.

It’s currently unclear how many will be involved in the larger work stoppage ABK Worker’s Alliance announced today. Last month, over 1,500 employees at the roughly 10,000 person company signed the letter calling on Kotick to resign.

Activision Blizzard and ABK Worker’s Alliance did not immediately respond to a request for comment.

Shareholder objects to Activision CEO Kotick's renomination to Coca-Cola board


Bobby Kotick, chief executive officer of Activision Blizzard, attends the annual Allen and Co. Sun Valley media conference in Sun Valley, Idaho

Thu, December 9, 2021, 9:51 AM·1 min read

(Reuters) -A Coca-Cola Co shareholder asked the beverage giant on Thursday to not renominate Activision Blizzard Inc's Chief Executive Officer Bobby Kotick to its board, as the video game company deals with lawsuits on workplace harassment.

Allegations of sexual harassment and discrimination at Activision earlier this year led to more than 20 employees being fired and 20 more individuals facing other forms of disciplinary action.

SOC Investment Group, which is also an adviser to pension funds, said Kotick bears "primary responsibility for the longstanding 'frat boy' corporate culture" that has put Activision under pressure and brought in lawsuits.


"The time and attention that Kotick will need to devote to the cultural crisis at Activision ought to preclude his ability to effectively serve as a director of a major global brand," SOC said.

Coca-Cola did not immediately respond to a request for comment, while Activision declined to comment.

SOC said it would also oppose Kotick and Coca-Cola's lead independent director Maria Elena Lagomasino's re-election, if Kotick was nominated.

(Reporting by Nivedita Balu and Tiyashi Datta in Bengaluru; Editing by Shounak Dasgupta)

EXPLAINER: Microsoft’s Activision buy could shake up gaming
By MATT O'BRIEN and TALI ARBEL

A sign for Microsoft offices, Thursday, May 6, 2021 in New York. Microsoft stunned the gaming industry when it announced, Tuesday, Jan. 18, 2022, it would buy game publisher Activision Blizzard for $68.7 billion, a deal that would immediately make it a larger video-game company than Nintendo. (AP Photo/Mark Lennihan)


Microsoft stunned the gaming industry when it announced this week it would buy game publisher Activision Blizzard for $68.7 billion, a deal that would immediately make it a larger video-game company than Nintendo.

Microsoft, maker of the Xbox gaming system, said acquiring the owner of Candy Crush, Call of Duty, Overwatch and Diablo would be good for gamers and advance its ambitions for the metaverse — a vision for creating immersive virtual worlds for both work and play.

But what does the deal really mean for the millions of people who play video games, either on consoles or their phones? And will it actually happen at a time of increased government scrutiny over giant mergers in the U.S. and elsewhere?

SO, IS IT GOOD FOR GAMERS?

“For the average person who is playing Candy Crush or anything else, there will probably be no changes at all,” said RBC analyst Rishi Jaluria.

But Jaluria and other industry watchers think it could be good news for game development more broadly, especially if Microsoft’s games-for-everybody mission and mountain of cash can rescue Activision from its reputation for abandoning favorite game franchises while focusing on a few choice properties.

“Microsoft wants to increase the variety of intellectual property,” said Forrester analyst Will McKeon-White. “Their target is anyone and everybody who plays video games and they want to bring that to a wider audience.”

He said the “most egregious” example of a popular franchise that Activision, founded in 1979, left by the wayside is StarCraft, last updated in 2015. Others include Guitar Hero, the Tony Hawk skateboarding games and MechWarrior, which McKeon-White said “basically wasn’t touched for two decades.”

On the other hand, the prospect of a console-maker like Microsoft controlling so much game content raised concerns about whether the company could restrict Activision games from competitors.

Microsoft expects to bring as many Activision games as it can to Xbox’s subscription service Game Pass, “with some presumably becoming Microsoft exclusives,” wrote Wedbush analyst Michael Pachter. However, he noted antitrust regulators may not allow Microsoft to keep games off Sony’s competing game console, the PlayStation.

Pachter said that Activision presents a model for Microsoft for how to evolve its classic console franchises. It has adapted Call of Duty into successful mobile and free games, and he expects the company to help Microsoft do the same with its own games, such as Halo.

IS THIS REALLY ABOUT THE METAVERSE?

Microsoft says so. And there are some ways Activision could help the tech giant compete with rivals like Meta, which renamed itself from Facebook last year to signal its new focus on leading its billions of social media users into the metaverse.

Metaverse enthusiasts describe the concept as a new and more immersive version of the internet, but to work it will require a lot of people to actually want to spend more time in virtual worlds. Microsoft’s metaverse ambitions have focused on work tools such as its Teams video chat applications, but online multiplayer games such as Call of Duty and World of Warcraft have huge followings devoted to interacting with each other virtually for fun.

“That’s where Activision really helps,” said RBC’s Jaluria. “Millions of people play Call of Duty online. The community element helps drive adoption.”

Pushing more people into such virtual social networks will not be all fun and games, however, and could amplify existing problems with online harassment, trolling and identity theft, according to Elizabeth Renieris, founding director of the Technology Ethics Lab at the University of Notre Dame.

WILL IT ACTUALLY HAPPEN?

That’s a big unknown. Regulators and rivals could turn up the pressure to block the deal.

Other tech giants such as Meta, Google, Amazon and Apple have all attracted increasing attention from antitrust regulators in the U.S. and Europe. But the Activision deal is so big — potentially the priciest-ever tech acquisition — that Microsoft will also be putting itself into the regulatory spotlight.

“I think it should get a hard look and it probably will get a hard look” by antitrust enforcers, said Diana Moss, president of the American Antitrust Institute. Regulators could ask questions about Microsoft making games exclusive to their own systems and about whether the company would harness user data gained in the acquisition to its advantage in its other businesses.

The Biden administration has been moving to strengthen enforcement against illegal and anticompetitive mergers.

If the deal fails, Microsoft will owe Activision a “break-up fee” of up to $3 billion. That prospect should motivate Microsoft to make concessions to antitrust regulators to get it done, said John Freeman, vice president at CFRA Research.

DOESN’T ACTIVISION HAVE WORKPLACE PROBLEMS?

Activision has attracted unwanted attention from U.S. workforce discrimination regulators, the Securities and Exchange Commission and its own shareholders over allegations of a toxic workplace. California’s civil rights agency also sued the Santa Monica-based company in July, citing a “frat boy” culture that had become a “breeding ground for harassment and discrimination against women.”

Microsoft CEO Satya Nadella noted in an investor call Tuesday that “the culture of our organization is my No. 1 priority,” adding that ”it’s critical for Activision Blizzard to drive forward” on commitments made last year to improve its workplace culture. Activision hasn’t made clear if its longtime leader Bobby Kotick, the CEO since 1991, will stick with Microsoft after the deal is closed.

Activision’s legal problems dragged down its stock price and might have made it easier for Microsoft to make a successful takeover bid. But a union representing technology and gaming workers said concerns about working conditions should be considered by U.S. and state officials before any deal is approved.

“Activision Blizzard worker concerns must be addressed in any plan - acquisition or not – on the future direction of the company,” Christopher Shelton, president of the Communications Workers of America, said in a statement.

Why Microsoft is splashing $103 billion on video games

The Economist

Jan 19 2022

On January 18, Microsoft announced its largest takeover in the company's 46-year history.

Even for Microsoft, which boasts a market capitalisation of around US$2.3 trillion (NZ$3.3t), US$69 billion (NZ$103b) is a lot of money.

On January 18 the firm said it would pay that sum – all of it in cash – for Activision Blizzard, a video-game developer. It is both the biggest acquisition ever made in the video-game industry and the biggest ever made by Microsoft, more than twice the size of the firm’s purchase in 2016 of LinkedIn, a social network, for $26bn.

The move, which caught industry-watchers by surprise and propelled Activision Blizzard’s share price up by 25 per cent, represents a huge bet on the future of entertainment. But not, perhaps, a crazy one.

JAE C. HONG/AP
Microsoft’s acquisition of video-game developer Activision Blizzard is the largest ever made by the firm – twice the size of the firm’s purchase of LinkedIn in 2016. (File photo)

The gaming industry was growing apace before the pandemic. Covid-19 lockdowns bolstered its appeal – to hardened gamers with more time on their hands and bored neophytes alike. Worldwide revenues shot up by 23 per cent in 2020.

NewZoo, an analysis firm, puts them at nearly $180b. Microsoft is already a big player in the business, thanks to its Xbox games console. It has made a string of gaming acquisitions since 2014, when Satya Nadella, its chief executive, took the reins. The Activision Blizzard deal would cement its position. Once completed in 2023, it will make Microsoft the third-largest video-gaming firm by revenue, behind only Tencent, a Chinese giant, and Sony, Microsoft’s perennial rival in consoles.

Activision Blizzard’s share price had slid by around 40 per cent between a peak last February and the deal’s announcement, as the company was embroiled in a sexual-harassment scandal and some of its games underwhelmed. That may have made it look cheap in relative terms, given the benefits it brings to Microsoft. It boasts annual revenues of around $8b and net profit margins of 30 per cent.

Most important, Activision Blizzard offers plenty of content – and in video games, as in the rest of the media industry, content is king, says Piers Harding-Rolls of Ampere Analysis, another research firm. Like the film business, where Star Wars films, even bad ones, are reliable money-spinners, video games rely increasingly on “franchises” – popular settings or brands that can be squeezed for regular new games.

Activision Blizzard boasts, among others, Call of Duty, a best-selling series of military-themed shoot-em-ups, Candy Crush, a popular pattern-matching mobile game, and Warcraft, a light-hearted fantasy setting.

In the short term, the deal gives Microsoft more of a foothold in the smartphone-gaming market, to which it has had little exposure. King, a mobile-focused subsidiary of Activision Blizzard, boasts around 245 million monthly players of its smartphone games, most of whom tap away at Candy Crush.

It is also a strike against Sony. If Microsoft controls the rights to Call of Duty, it can decide whether or not to allow the games to appear on Sony’s rival PlayStation machine. When Microsoft bought ZeniMax Media, another games developer, for $7.5b in 2020, it said it would honour the terms of ZeniMax’s existing publishing agreements with Sony, but that Sony’s access to new games would be considered “on a case-by-case basis”.

Screenshot of video game Call of Duty: Modern Warfare 3. (File photo)

In the longer term, says Harding-Rolls, the deal should help Microsoft achieve its ambition to make gaming cheaper and more accessible (including, if hype is to be believed, in the virtual-reality “metaverse”).

Its “Game Pass” product already offers console and PC gamers access to a rotating library of video games, which usually cost $40-60 each, for $10 a month. Adding Activision Blizzard’s catalogue to the service could boost its appeal. It could also strengthen Microsoft’s two-year-old game-streaming service, which aims to use the firm’s Azure cloud-computing division to do for video games what Netflix did for video.

Microsoft hopes to stream games across the internet to a phone, television or PC, removing the need to own a powerful, dedicated console or PC. That could lower the cost of the hobby and draw in more players, especially in middle-income countries where smartphones are common but consoles are rare. And that, in turn, would make exclusive content even more valuable.

Other firms, both games-industry veterans and arriviste tech titans attracted by the sector’s growth, have streaming ambitions of their own. Sony runs its own service, called “PlayStation Now”. Amazon launched an early version of its own “Luna” service in 2020. “GeForce Now”, a streaming offering from Nvidia, a maker of gaming-focused microchips, launched the same year. But none is as well-placed as Microsoft, which has decades of experience in the games business and boasts the world’s second-largest cloud-computing operation after Amazon.

And the more content Microsoft owns, the more attractive it can make its service compared with its rivals.

Such thinking may provoke more deals by Microsoft’s competitors, eager to snap up franchises of their own while they can. The gaming industry was already seeing plenty of merger activity. Last year saw five deals worth $1b or more.

On January 10 Take-Two Interactive, a game developer and publisher, spent $13b to buy Zynga, a maker of mobile-phone games. Besides Amazon, both Apple and Netflix have dipped their toes into the video-game business in recent years; an acquisition by either one could help boost their presence. Consolidation is the name of the game.

© 2022 The Economist Newspaper Limited. All rights reserved. From The Economist published under licence. The original article can be found on www.economist.com

What Activision Blizzard’s acquisition by Microsoft means for its pending lawsuits, gamers

Jan 18, 2022 

By —
Geoff Bennett
By —
Karina Cuevas
PBS NEWS

Microsoft announced plans Tuesday to buy Activision Blizzard — a huge leader in game development — in a deal valued at $75 billion. But the acquisition comes with significant issues. There have been numerous allegations of sexual misconduct in the Activision workplace. Geoff Bennett looks at those concerns and others behind the deal.

Full Transcript


Judy Woodruff:

Microsoft announced plans today to buy Activision Blizzard, a huge leader in video game development, in a deal valued at $75 billion.

But the acquisition comes with significant issues. There have been numerous allegations of sexual misconduct in the Activision workplace.

Geoff Bennett looks at those concerns and what's behind the deal.


Geoff Bennett:

Judy, thanks to video games subscriptions and the Xbox, Microsoft is already a major player in the gaming market, an industry generating $175 billion a year in revenue.

But acquiring Activision will allow Microsoft to up its own game during a pandemic-fueled gaming boom. Activision is the company behind major hits like "Call of Duty, "World of Warcraft," and "Candy Crush." And the takeover would make Microsoft the world's third largest gaming company.

For more, we're joined by Kirsten Grind of The Wall Street Journal.

Thanks for being with us.

And, if you can, put this number in context for us, this $175 billion, the $75 billion acquisition. What does it mean for the gaming industry generally?


Kirsten Grind, The Wall Street Journal:

It's huge. It's just one of the biggest deals, period, one of the biggest all-cash deals.

And for the gaming industry, it really puts so much under one roof. So you had Xbox and now you have Activision's hits that will be Microsoft. So it gives Microsoft so much more might than it had before.


Geoff Bennett:

And Microsoft, which makes the Xbox consoles, owns studios that produce hits like "Minecraft," it's gotten more aggressive with gaming in the last several years. How does this acquisition play into their long-term tragedy?


Kirsten Grind:

Right.

Well, Activision has so many long term franchises. So, with the addition of Activision there, as you said, they become the largest gaming company by revenue worldwide. So, it absolutely, pending the deal's closure, makes them a very serious player in the space.


Geoff Bennett:

And this deal, as you know and as you have reported, this is coming as Activision faces multiple regulatory investigations into alleged sexual assault and mistreatment of female employees going back years.

And just yesterday, Activision fired several of its own executives following its own investigation, its own review of what transpired. Give us a sense of what is happening within that company. And has Microsoft indicated how it will handle it moving forward?


Kirsten Grind:

That's right.

Well, Activision is really, quite frankly, in trouble with its culture at this point. It's facing three regulatory investigations, the state of California, the EEOC, the Securities and Exchange Commission. We have reported about mishandling of some of the misconduct allegations. Its stock is down about 30 percent from the first of the lawsuits about its culture last summer.

So it was facing pressure from employees, from shareholders. So this is a really — it's kind of a good solution, really, for Activision at this point.


Geoff Bennett:

And based on your reporting, I mean, do you know what happens to Activision's CEO, Bobby Kotick? He's led the company for more than three decades, but there were allegations that he was aware of some of these complaints of misconduct, harassment, even assault, but yet that he neglected to share it with the board.


Kirsten Grind:

That's right.

We reported that in November.And that's actually kind of what led to Microsoft's approach when they were in the middle of all this turmoil after our story came out. And so Bobby actually is not expected to stay with the company after the deal closes. Again, these deals can take a very long time to close, and it's also pending a lot of regulatory approval.

But, yes, he's not expected to stay.


Geoff Bennett:

Can you give us a sense of the nature of what's been alleged?


Kirsten Grind:

Definitely.

So, some of the regulatory agencies have alleged sexual harassment, sexual assault, gender pay disparity, just a broad range of workplace misconduct across the board.

What we wrote about in our November story in The Wall Street Journal was about how Bobby Kotick himself knew about some of these workplace misconduct allegations and didn't tell the board about them.


Geoff Bennett:

Big picture, as we wrap up our conversation here, this acquisition is almost akin to Disney acquiring Marvel back in 2012.

Microsoft will now own a huge piece of the gaming industry, as we have been discussing. What does this mean for gamers generally?


Kirsten Grind:

You know, I think — going back to the culture questions, I think this could be a very good thing for gamers.

I think I heard a lot out there about how it was harder to get behind a company that was facing so many culture issues. And if a company like Microsoft can to help turn that around, I think that would be good for everyone, frankly.


Geoff Bennett:

Kirsten Grind, thanks so much for your reporting and your perspectives on this major deal between Microsoft and Activision.


Kirsten Grind:

Thanks so much for having me.

 

NTD spoke with Daniel Ives, senior equity analyst and managing director at Wedbush, about Microsoft's acquisition of Activision Blizzard, the video game studio behind blockbuster hits like Warcraft, Overwatch, and Call of Duty.

Game on: Microsoft’s Activision deal ignites M&A talk in rivals

Thyagaraju Adinarayan and Ryan Vlastelica, Bloomberg News

Global gaming stocks rallied after Microsoft Corp.’s landmark US$69 billion takeover bid for Activision Blizzard Inc., a move that could help enliven the sector after a cranky start to 2022.

U.S. rivals Electronic Arts Inc., Take-Two Interactive Software, France’s Ubisoft Entertainment SA and Poland’s CD Projekt SA all rose on Tuesday, with some talked-up as potential acquisition targets. The recent selloff in their shares and rising interest in gaming and the metaverse from large companies such as Meta Platforms Inc. has raised expectations for more deals in the industry. 

“If Microsoft can get them over the line without any antitrust issues, the rest are all in play,” said Neil Campling, an analyst at Mirabaud Securities who sees Electronic Arts as “the most obvious takeout target.” Ubisoft is seen as another potential target, but could be hurt by the family holding structure, according to Campling. 

Microsoft’s push for Activision follows Take-Two’s recent offer for mobile game maker Zynga Inc. Cowen analyst Doug Creutz writes that the two deals, coming in consecutive weeks, highlights how “these companies carry a lot more strategic value than was being acknowledged by the market.” He speculated that Sony “might have to consider chasing their own blockbuster acquisition, in order to enhance its own exclusive portfolio.” If so, Electronic Arts would be the most logical choice, according to Cowen.

Jordan Klein, a managing director at Mizuho Securities, wrote that there were only a few key names that remained as possible targets, and that Ubisoft, Take-Two, and Electronic Arts could all see valuations expand as potential buyers “could look to make a move.” He noted attractive valuations for Take-Two and especially Electronics Arts, which “has one of the best game title libraries.” He named Netflix Inc., Walt Disney Co., Apple Inc., Amazon.com Inc., and Meta Platforms as potential buyers. 

Activision shares jumped 26 per cent on Tuesday, while Electronic Arts rose 2.7 per cent and Take-Two rose 1 per cent. The rallies stood out on a day where tech was broadly lower amid ongoing concerns over bond yields. Microsoft fell 2.4 per cent.

Piper Sandler sees Unity Software Inc. as an indirect beneficiary of Microsoft’s move, writing that the deal represents “the beginning of a metaverse arms race.” Shares of Unity fell 4.5 per cent.