Activision Blizzard Shareholders Raise Concerns About Ongoing Lawsuit

The state of California is currently suing Activision Blizzard after a two-year investigation into the company’s closed-door culture. The lawsuit addresses a variety of allegations of workplace abuse, including sexual harassment, gender discrimination, and a culture of “brotherhood” regarding internal behavior. As more details emerge regarding the lawsuit, an investor call was made on August 3, and the overall impression of the meeting was different from that of a regular shareholders meeting. While promotional goals and release dates were touched, including news about Diablo II and Overwatch 2, part of the call took a somber tone as stakeholders asked questions about the company’s future.

Activision Blizzard CEO Bobby Kotick began the conversation with a statement that sounded like his public labor lawsuit confession last week. “I want to start by making it clear to everyone that there is no place in our company where discrimination, harassment or unequal treatment of any kind would be unacceptable,” said Kotik, opening an investor meeting in August 2021. “We really appreciate the current and former employees who have shown courage in the past and last days.”

Kitty echoed several points from his initial public announcement, stating that caring for the work environment is supported under the umbrella of Activision. He added that he believes Activision Blizzard “will be the company that sets an example in our industry.” He went on to provide investors with background information on Jennifer Oneal and Mike Ibarra, Blizzard’s new co-heads. Promising that investigations into the allegations will continue despite public backlash against the firm chosen to conduct the investigation. This is WilmnerHale, the same law firm that has spearheaded Amazon’s efforts to keep its workers from unionizing. This innovation has been viewed negatively by many in the gaming industry, including the hundreds of Activision Blizzard employees who have since made a name for themselves. demanding a new firm

During the call, Kotik added: “Since our work cannot be successful with different voices, perspectives and talents, we have committed ourselves to reviewing different lists of candidates for all open positions. And we will continue to add resources to ensure that this happens. throughout the company. Over the past few years, we’ve made significant culture changes, reflected greater diversity in our leadership teams, and created an environment conducive to reporting any misconduct. We’ve expanded our internal programs to encourage employees to report violations. We have strengthened the channels through which employees can raise concerns in a confidential and secure manner without fear of retaliation. We are channeling additional resources into our Compliance and Employee Relations teams that investigate complaints. ”

During the conversation, they talked about the company’s earnings, and COO Daniel Alegre talked about the franchises in the second quarter and the current state of gaming ecosystems in games like Call of Duty. However, the first two questions during the Q&A section were opened to investors who brought attention back to current events. Matthew Coast, an analyst at Morgan Stanley, began by asking, “We’ve seen a lot of headlines about the lawsuit and employee concerns. Could you elaborate on what you have been doing and what you will be doing to address these problems? And then, secondly, can you expand the expected performance impact as you work through the situation, and do you expect any pipeline impact? “

Alegre replied:

As you’ve heard from Bobby, our people are truly our greatest asset. And we, as a leadership team, remain fully focused on providing a diverse and safe environment for our teams and have taken a number of actions to date. For example, we hired a third-party law firm to review our policies and procedures regarding our workplace and where employees can contact if they have any concerns.

We will also add employees to our Compliance and Employee Relations teams that investigate employee issues. This is so that we always consider different candidates for all open positions as well. As a leader, I know how important a diverse workforce can be to all aspects of our business. And this is critical. We will also assess and train our HR managers to ensure they are following our employee problem solving processes and taking the right action. And we actively engage with our employees to hear and respond to their feedback.

For several years now, we have focused on bringing greater diversity to the company, especially in leadership positions, and have dramatically increased the number of women and minorities in both senior management and our business units. Our compensation practice is that men and women receive equal pay for equal work. As you have heard, we have appointed Jen Onil and Mike Ibarra as the new co-heads of Blizzard, and I am so pleased that Blizzard’s original founder, Allen Adham, who returned to the company a few years ago, continues to lead our work. projects. We have great leadership at Blizzard and are very excited about the new direction the company is taking.

The response did not confirm some of the more serious allegations in the now public trial, such as “booth crawling” Bill Cosby Suiteas well as behavior that reportedly led to the suicide of one employee after a work trip with her supervisor. The mention of new full-time employees can lead to positive change, although the changes needed to address all documented allegations will take time to be successfully implemented.

Andrew Werkwitz, a Jefferies analyst, added a similar question when asking a question about morale in relation to the allegations made public. He said, “I’m curious how Mike and Jen are planning to rekindle the pride that Blizzard was known for … When you listen to everyone’s stories and experiences and make the necessary changes, it won’t affect production in the future.” It is worth noting that Urkwitz asked about this after several statements were made that the production was not affected.

Onal, Executive Vice President and Co-CEO of Blizzard, responded:

Firstly, nothing is more important to me than our people. And I know that Mike Ibarra, who leads Blizzard with me, feels the same way. Since joining the studio earlier in the year, I’ve been fortunate enough to work closely with the Diablo and Overwatch teams. I see a lot of progress in Overwatch 2 and a lot of games in the Diablo universe. I am constantly inspired by our talented teams, their creative vision, their desire to put gameplay first. Our people are passionate about our games. They understand our players, and in many cases they come from the gaming communities themselves and naturally strive to serve them.

And as Bobby and Daniel mentioned, we are expanding these teams. We’re doubling our developer recruitment as we expand the scale and vision of our franchises. When we get together, we make some of the best games in the industry. And now we see that energy is applicable to our culture, which is equally important. We have a lot of work ahead of us, but the enthusiasm and productivity are already here. And when our people feel safe and supported, everything else will take care of itself.

The now-former President J. Allen Brack, who was among those directly named in the lawsuit regarding his alleged toxicity role at the center of current conversations, added: “Our developers’ passion for innovation and creativity is what makes Blizzard great. … This is why we have managed to create so many great games in 30 years. And that has always been a vision from the very beginning. I look forward to our future in terms of what we create together, in terms of creating a new culture and reviving this spirit. We know a lot about this, but our new game pipeline has been in development for many years. And he’s better than ever in our core franchises and mobile, new IPs and new genres. I “I’m looking forward to our teams launching their already announced new games in the near future and announcing several new ones that you haven’t heard of yet.”

The conversation eventually ended and coincided with a regular meeting with investors.s themes. However, investor response from a mega-publisher like Activision is a key component of how effective change can be implemented, so this investor call Deserves attention.

In addition, several shareholders have filed a class action lawsuit against Activision Blizzard, citing the current talk “damaging economically” potential future profits. Unfortunately, this verbiage is the language of many, and money speaks to a publisher like Activision. You can see the complete legal documentation files on the right here to learn more about the class action proposal.

In particular, the call also included news that Diablo II has been pushed back to a new projected release window set for the first half of 2022. Activision Blizzard has also confirmed that more of Overwatch 2 will be “revealed soon” and confirmed that the development of the sequel has passed “an important internal milestone”, although details of this milestone were not disclosed.

In related news, Kitty released a statement last week addressing the concerns but apparently bypassing the requirements listed in a public letter to management. This letter was followed by a massive strike by Blizzard employees, which was supported by an open letter from Ubisoft employees who faced similar cases highlighted in a lawsuit in California.

To learn more about the ongoing litigation, including the details listed in the lawsuit against Activision Blizzard, check out our previous review here.

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