Will Microsoft be able to revive Activision Blizzard's image?
We are obviously talking about the legal case of July 2021, from which a series of bad behaviors emerged that caused the giant to collapse on the stock exchange and eclipse its image in front of the public. When the acquisition reaches the end of its process, all these problems will be with Microsoft, which will be in the eyes of the world, and the law, responsible for what happens in the company.
Will Phil Spencer's Guide To Revive Activision Blizzard's Image?
What are the problems Microsoft will face
An excerpt from the lawsuit between the California DFEH and Activision Blizzard In July 2021, the California Department of Fair Employment and Housing, an agency that protects the civil rights of Californian workers, has sued Activision Blizzard for a series of serious irregularities that occurred in the studios of Blizzard Entertainment and beyond. An endemic situation in society, permeated at all levels by the so-called Frat Boy Culture. We are talking about small social groups present in the working reality of the Activision Blizzard offices, characterized by habits and behaviors very similar to those of the male brotherhoods in American colleges. Jokes, harassment, sexism and bullying of various kinds perpetrated by a handful of individuals, covered and protected in turn by their peers. A behavior that over the years has not only ruined the health of hundreds of employees, harassed by these individuals and never protected and defended by the company, but which has created real monsters.Sadly famous is the case of "Cosby Suite", the hotel room in which, during BlizzCon, former World of Warcraft designer Alex Afrasiabi brought other company employees to harass them. Access to Afrasiabi's hideout was also highly sought after by other employees, who in that "friendly" context could meet other important members of the company. We certainly don't have to explain to you how wrong it is to want to network in a hotel room symbolically named after an actor convicted of rape.
And the Cosby Suite, according to the testimonies and reports that have emerged over the months. , is just the tragic tip of the iceberg: among the most gruesome facts, the 2016 rape of a Sledgehammer Games employee at an office party, or the suicide of another Activision employee after photos of her private parts are been routed throughout the office. Everyone knew but no one acted. The only ones to fall from the clouds were the members of the board of directors, because they were not informed of the facts that later emerged in court. Sledgehammer's employee, sources close to the incident report, managed to secure an agreement with Activision, a meager consolation that many other employees have never obtained.
And this is obviously only what emerged from the investigation of the 2021. We hope for Microsoft that Activision Blizzard's accounts are in order and that there will be no unpleasant surprises, given that not even from a financial point of view the company seems to have been particularly loyal. In February 2017, Activision announced a $ 1 billion buyback program: buyback refers to the repurchase of its own shares by the company that issued them. A legal practice is widespread among listed companies, and there are several reasons why such a program can be opened. Activision investors at the time responded by buying heavily without knowing that while they were buying, Activision Blizzard titan insiders were selling, taking home further profits as the stock price skyrocketed. On February 10, a day after the company announced its buyback plan, Activision's chief executive Bobby Kotick sold nearly 4 million shares for $ 180.8 million. His average sales price was 15% higher than what he would have gotten before the shares hit the news. Within the next seven days, a total of five senior Activision officials had sold shares totaling more than $ 430 million, according to their records with the Securities and Exchange Commission. It would be insider trading, an operation punishable by law.
Call of Duty: Vanguard is the latest CoD developed by Sledgehammer Games In 2019, Activision Blizzard ends up in the crosshairs of the TaxWatch UK group of experts, which has reported how the company avoided paying several million in taxes thanks to the use of companies in Bermuda and Barbados (we leave you, for those interested, the entire report at this link); obviously not counting the tax relief given by large philanthropic donations, also this method strongly used in the States to evade taxes. Obviously Activision is not the only company to have remained involved in tax problems of this type, on the contrary, let's say that we are talking about events almost on the agenda. Electronic Arts was similarly cared for as Activision during its buyback program, and Andrew Wilson lined his pockets the same way as Kotick; Rockstar is the other big giant that has ended up in the TaxWatch group's crosshairs and dozens of billionaires are dedicated to philanthropy to find clean tricks to cut taxes at the end of the year.
In addition to these, there have been many signs that over the years they have shown how something broke inside Blizzard. Many think that everything depends on an increasing interference by Activision in the management of the company, but the developer who for several decades has been a bulwark of quality and seriousness, in recent times had begun to show that something had changed. From the Blitzchung case to the announcement of Diablo Immortal, from the mass layoffs to the release of Warcraft III: Reforged, there are many things that were no longer going well in Blizzard.
The role of Bobby Kotick
Bobby Kotick will keep the role of CEO of Activision Blizzard until the end of the transition In such a complex scenario, it would be unfair to elect a single scapegoat, blaming him for the behavior of dozens of employees with despicable morals ... but in this case Bobby Kotick seems to have played a leading role. Let's leave out the cases related to the fiscal part of the company, where his participation is undoubted, as he is informed and aware CEO, facts that, added to the managerial bonuses, had made Kotick indigestible for some time already for some shareholders and the board of directors of Activision Blizzard. More controversial (if possible) is his role in the lawsuit last July. According to the famous article in The Wall Street Journal, Kotick was perfectly aware of the situation inside the company and the toxic sub-culture that permeated it. He had been briefed on the more serious cases, which had required the intervention of Activision Blizzard's lawyers, and did not lift a finger when three years before the scandal, some employees accused of misconduct were fired, with the praise of the head of the office for the culprits who raised the curtains, and the request to the victims to remain silent, because "everything was fixed". Kotick himself will explain to the board of directors that he had actually taken action for the situation complained of especially in Blizzard, and that after a couple of layoffs it was water under the bridge.According to Kotick, the lack of a release certain for Diablo IV and Overwatch 2 are the cause of the collapse of the shares Recently, however, Kotick has pointed the finger at Blizzard, asserting that the reason for the drastic drop in the value of the company's shares is due to the delays of Overwatch 2 and Diablo 4. In an interview with Venture Beat a few days ago, Kotick points out that the acquisition by Microsoft is actually the natural consequence of a conversation carried on for years with the Redmond giant: Activision Blizzard planned a massive expansion in the fields, however. where it did not have the resources and skills, which Microsoft did. At that point, the very good offer from Microsoft made it impossible to refuse, according to Kotick. Clearly Microsoft's proposal comes in the face of the decline in value of the shares of Activision Blizzard and Dean Takahashi of Venture Beat does not fail to ask Kotick if the investigation into sexual harassment was a determining factor, given that it certainly seemed to influence the price of the shares.
Overwatch 2, along with Diablo IV, have been very problematic projects for Blizzard "I think what affected the share price the most was the postponement of Overwatch and Diablo. And then, I think that people started to see that this year's Call of Duty wasn't doing so well, "Kotick said, then continued." So I think certainly the California DFEH filing and The Wall Street Journal article have contributed to that, but the shares go up and down for a variety of reasons. I think our point of view, $ 95 per share is a very good deal for our shareholders. And so it was an easy judgment. and independent. It's a great deal ".
The CEO's position seems to be compromised by now, despite the fact that he seems absolutely impervious to the common opinion that everyone in the industry has made of him. We are speaking, in fact, of a person who does not he just ignored all the possible warning signs that came to his attention, but which he even created his own hand. In 2006 Kotick was accused of harassing and mistreating his personal assistant, even leaving her a message on the answering machine in which threatened to kill her. In 2007, however, a flight attendant of a jet co-owned by Kotick sued him after the other owner of the jet fired her just because she was told by the same. of being harassed by the pilot of the plane. An arbitrator who dealt with the litigation of the court costs of the case, swore he heard Kotick tell the stewardess's lawyers "I destroy you".
What remains of good
Now we have to look ahead: is there anything good left to collect among the pieces? The acquisition process will be completed in the next fiscal year and will have to pass the antitrust scrutiny: in this period, in the face of the aforementioned turbulence, is there anything good that remains? The first is the least concrete, but it is a nice warning: you cannot go unpunished in the face of an offense or a lack of ethics forever. To testify to this truth there are actually many other companies which, each for different reasons, sooner or later came under the attention of the public for questionable conduct.Linked to this, the importance of seeing the continuation of these scandals in the courtrooms. The existence of legal proceedings is not only for the victims, who can thus find justice, but also for all those who one day find themselves in the same situation. Industrial workers not only need the courage of those who tried to assert their rights before them, but they need legal precedents, a case history that proves that the victims have won in court and that exposing themselves is the thing. right.
Raven Software worked on Call of Duty: Black Ops Cold War and Warzone The culmination of all this is the creation and recognition of trade unions for industrial workers, too often subject to conditions of extreme work and devoid of any protection (since very often it is the human resources departments that keep silent about the atrocities that happen in the offices). Within the same Activision Blizzard has created an organization led by employees of Raven Software, to create a real union. The manifesto reads: "Game Workers Alliance is a movement formed and maintained by employees of the video game industry in different disciplines, resulting mainly from the labor rights strike of Raven Software QA employees. Our goal is to improve the conditions of the workers of the game. video game industry by making it a more sustainable and equitable place where transparency is key. Furthermore, we support our workers without rights and minorities by creating a different space for their voices to be heard in solidarity. "
All 'early December, Raven Software had to lay off a third of its QA testers just as a matter of staff cuts. There have been numerous layoffs in Activision Blizzard studios in recent years, despite Bobby Kotick always showing brilliant returns: the more Activision earned, the more he fired. Trade unionists today are legitimately wondering whether the takeover will make the unionization process more difficult. And Microsoft over the years has had its differences with the world of unions: it took years of negotiations between Microsoft and internal supplier Lionbridge to get to sign a union agreement in July 2016, which included a clause for affiliates to union allegedly dropped the charges against Microsoft. In September of the same year, a mass layoff was announced at Lionbridge for "Tier 1" workers, which included all workers who had joined the union agreements.
Phil Spencer seems very aware of Activision's reputation Blizzard In The New York Times' Sway podcast, Kara Swisher asked Phil Spencer directly what he meant by "evaluating all aspects of the Xbox-Activision relationship." Spencer replied, "The work we do specifically with a partner like Activision is something that, of course, I don't talk about publicly. We've changed the way we do certain things with them, and they're aware of that. But it's not about publicly shaming. other companies. The history of Xbox is not spotless. "
The interview came out on January 10, a week before the acquisition was announced, and in hindsight, those words make sense that they wouldn't have had two weeks ago. But the hope is that they also make sense for the future. While everyone despairs, figuring scenarios in which all Activision Blizzard IPs become Xbox exclusives, everything will arrive on Game Pass and "Call of Duty exclusive, my lady, is the end of an era", it is good to remember that without the development team healthy and a sensible company organization chart, all of these games will have a hard time getting out. The acquisition process will be long and will have to be completed by June 2023, and we hope that the internal renovations will be such as to restore confidence and serenity to the Activision Blizzard studios. Once the process is complete, Microsoft will be directly responsible for what happens at Activision: Spencer seems very aware of that, let's hope he's the right man to fix things.
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