Activision Blizzard CEO Bobby Kotick needs to resign now

This article first appeared on Yahoo Finance Tech, a weekly newsletter highlighting our original content about the industry. Get it straight to your inbox every Wednesday by 4PM ET. Subscription

Wednesday 24 November 2021

A gaming giant can’t reinvent itself if it’s still in charge

Activision Blizzard (ATVI) CEO Bobby Kotik needs to step down. Kotick owns the CEO of one of the largest video game companies in the country He reportedly told executives At Activision Blizzard he would resign if he could not solve the company’s countless harassment scandals in a short time.

But the problems at Activision Blizzard will require systemic changes, including removing Kotick now – especially then. The Wall Street Journal He revealed last week that he had been aware of the company’s issues for years. These problems include allegations of rape, sexual harassment, and sexual and racial discrimination.

If the company wants to move past these controversies, it has to take an exciting step. If not, Activision Blizzard risks losing the people who make its games so successful: its developers, testers, and engineers.

“People are leaving. I receive goodbye emails, like at least three a week,” explained Jessica Gonzalez, Senior Test Analyst at Activision Blizzard’s Battle.net.

Bobby Kotik returns to the afternoon session of Allen and Co Sun Valley's annual media conference in Sun Valley, Idaho, US, July 7, 2021. REUTERS/Brian Lawson

Bobby Kotik returns to the afternoon session of Allen and Co Sun Valley’s annual media conference in Sun Valley, Idaho, US, July 7, 2021. REUTERS/Brian Lawson

added Gonzalez, who helped organize an employee’s checkout After last week’s newspaper report.

Colin Amerman, director of the Gender Initiative at Harvard Business School, explained that mass immigration could only get worse.

“This is very bad for the health of your organization and ultimately for efficacy,” she said. “You have people who are not involved in the work. They don’t trust leaders. They are more likely to look elsewhere. So you will lose talent, and the talent you are holding will probably not work to its true potential.”

Employees demand change

The magazine’s investigation into Activision Blizzard and Kotick sparked a firestorm among employees who organized their second strike this year.

On Monday, Activision Blizzard announced that it has launched a Workplace Responsibility Committee that ultimately aims to eliminate harassment and discrimination. But that may not be enough to satisfy workers, who have been calling for change for months.

Activision Blizzard employees pulled out for the first time in July when the California Department of Employment and Housing filed a lawsuit alleging the “Call of Duty” and “World of Warcraft” maker had allowed a culture of sexual harassment to fester unchecked for years.

The lawsuit portrays a company as fostering a “boy fraternity culture” in which men grope female colleagues and deny women promotions and bonuses. The complaint alleged that a woman had committed suicide because of her relationship with a male supervisor. The same woman was also allegedly harassed by other co-workers who shared a nude photo of her at a holiday party.

According to the lawsuit, one employee noted that “women on the Battle.net team were subjected to degrading comments, the environment was akin to working in a fraternity house, and that women who were not ‘huge players’ or ‘staple players’ and did not enter the party scene were disqualified and treated as They are strangers.”

New allegations have also surfaced, including one that Kotick left a voicemail to help him in which he threatened to kill her. This issue, according to the newspaper, was later settled out of court. (A company spokeswoman told the newspaper, “Mr. Kotick quickly apologized 16 years ago for the apparent and inappropriate voicemail, and deeply regrets the exaggeration and tone in his voicemail to this day.”)

LONDON, ENGLAND - NOVEMBER 4: Call of Duty: Vanguard launch event at the Village Underground on November 4, 2021 in London, England.  (Photo by Joe Maher/Getty Images for Vanguard)

LONDON, ENGLAND – NOVEMBER 4: Call of Duty: Vanguard launch event at the Village Underground on November 4, 2021 in London, England. (Photo by Joe Maher/Getty Images for Vanguard)

The magazine also reported that Kotick failed to tell the board of directors that an employee had alleged that she had been raped by her male supervisor. The allegations increased pressure on Kotik to submit his resignation along with employees Create a Change.org petition seeking to build popular pressure to oust him. As of Wednesday, the petition has received more than 28,000 signatures.

It’s possible that this petition has received support from at least some game developers, who are arguably the most important roles in Activision Blizzard. And according to Jefferies analyst Andrew Uerkwitz, the longer Kotick remains in office, the harder it will be for Activision Blizzard to retain or recruit star developers.

“The longer it stays, the more likely we will see a very high turnover, if not higher than what we have seen in the last couple of years. This will make game development very difficult.”

In an analyst note after the magazine story was published, Uerkwitz acknowledged that the CEO of a game company is more valuable to that company than any single developer. However, the collective development talent is by far the most important asset for the games company. The erosion of this talent is the greatest major risk to any creative work.” “This risk is currently playing out and accelerating.”

It’s not just about unhappy employees

The Big Three video game hardware makers Activision Blizzard also confronted, telling their workers they were troubled by the allegations in the company.

According to Bloomberg, Sony (SonyPlayStation President Jim Ryan wrote in an email to employees that he and the company’s leadership were “frankly disappointed and stunned” to learn that Activision Blizzard had not done enough to address its harassment and discrimination issues.

Microsoft (MSFTThe head of Xbox, Phil Spencer, meanwhile, Tell employees via email He was “disturbed” by the reports in the newspaper article. and FanByte confirmed that the American Nintendo (NTDOY) President Doug Bowser wrote in an email to employees that he found the accounts in the newspaper article “disturbing and disturbing.”

Irvine, CA - JULY 28: Several hundred Activision Blizzard employees went on strike that they said was in response to the company's leadership over a lawsuit highlighting alleged harassment, inequality and more within the company out of the gate at Activision Blizzard's headquarters on Wednesday, July 28, 2021 in Irvine, California. California.  (Allen J. Schaben/Los Angeles Times via Getty Images)

Irvine, CA – JULY 28: Several hundred Activision Blizzard employees went on strike that they said was in response to the company’s leadership over a lawsuit highlighting alleged harassment, inequality and more within the company out of the gate at Activision Blizzard’s headquarters on Wednesday, July 28, 2021 in Irvine, California. California. (Allen J. Schaben/Los Angeles Times via Getty Images)

With some of Activision Blizzard’s biggest industry partners objecting to this, the company could face dire consequences. In particular, Spencer said that Xbox is evaluating all aspects of its relationship with Activision Blizzard in the wake of The Journal story.

According to Uerkwitz, a lack of change at Activision Blizzard could harm the company’s ability to market its games at major events like Sony’s PlayStation Showcase and at its annual E3 conference. So far, it appears that Sony has pulled the latest “Call of Duty” version of the game featured on its sales site.

“It will be difficult to market games. It will be harder to make games. Ultimately, Blizzard fans are very excited. They may choose not to buy games. Reviewers may choose not to review games. So they are likely to be in a risky place,” Orkowitz explained.

Of course, removing Kotick from the CEO position won’t change Activision Blizzard overnight. But it will go a long way in proving that the company is really serious about reinventing its shattered culture.

by Daniel Holly, technical editor at Yahoo Finance.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on TwitterAnd InstagramAnd YoutubeAnd Facebook social networking siteAnd Flipboard, And LinkedIn

Write a Comment

Your email address will not be published. Required fields are marked *