Government Officials Pressuring Activision Blizzard Are Now Threatening The Company’s Profits

Government Officials Pressuring Activision Blizzard Are Now Threatening The Company’s Profits
Image: Activision Blizzard / Kotaku

State treasurers from California, Massachusetts, Illinois, Oregon, Delaware, and Nevada are calling on Activision Blizzard to take more serious measures in addressing ongoing high-profile investigations and lawsuits about the company’s troubling culture. According to Axios, said treasurers have asked to meet with the board members at Activision Blizzard by December 20, threatening action against the company if it does not comply.

A quick recap: Activision Blizzard have been accused of fostering a “frat boy” work culture where women across multiple studios were sexually harassed, assaulted, and psychologically traumatized. A more recent Wall Street Journal investigation also unearthed that company CEO Bobby Kotick knew about the sexual misconduct allegations over the years, often downplaying them or actively participating in the misconduct. While the state of California was already involved in these Activision Blizzard proceedings, and a number of entities are calling for Kotick’s resignation, now more government figures are joining the chorus.

State treasurers, for those who don’t know, are in charge of overseeing financial matters that concern both its state and citizens. Treasurers in states like Illinois, for example, serve as auditors of public accounts. But why would a state treasurer care about what a video game company is doing? Well, some states have active investments in Activision Blizzard that are affected by the company’s stock prices — which in turn affects pension funds that people use in retirement. But having investments in Activision Blizzard also means these government shareholders have some power in dictating what the company does next. And right now, the treasurers aren’t happy with Activision Blizzard’s leadership.

“We’re concerned that the current CEO and board directors don’t have the skillset, nor the conviction to institute these sweeping changes needed to transform their culture, to restore trust with employees and shareholders and their partners,” Illinois state treasurer Michael Frerichs told Axios.

While Kotick has reportedly proposed that he would consider quitting his position as the CEO if he can’t fix the company’s culture, and Activision Blizzard has formed a Workplace Responsibility Committee “ to improve workplace culture and eliminate all forms of harassment and discrimination at the Company,” Frerichs told Axios that “there needs to be sweeping changes made in the company.”

“One thing the Treasurers bring is also a bit of a spotlight here and a little public pressure as well,” Frerichs told Axios, who also noted he was troubled by the news of unequal pay at the company. “So it’s not all just about the number of dollars and number of shares that we have.”

The Massachusetts state treasurer Deborah Goldberg shared similar concerns with Frerichs and was baffled that the Activision Blizzard board members stood by Kotick following demands for his resignation. Goldberg told Axios that Activision Blizzard’s case calls for “a true investigation” from “an outside investigator.” Even a proposed $US18M settlement to the victims of harassment at Activision Blizzard doesn’t seem to be doing much in convincing people that the company is committed to deeper changes to the overall company culture.

Read More: Let’s Meet The Board Members Supporting Besieged Activision Blizzard CEO Bobby Kotick

“You can point to, ‘Hey, we paid the victims, we’re making them whole’,” Frerichs said, “But if you’re continuing a culture that creates new victims in the future, you are creating more risk for your company,” he said.

Pressure has been mounting on Activision Blizzard to address their work policy both outside and within the gaming industry. Head of Xbox Phil Spencer, PlayStation boss Jim Ryan, and Nintendo president Doug Bowser sent an email to their staff criticising Activision Blizzard’s company culture. The National Legal and Policy Centre also called upon Coca-Cola Chairman and CEO James Quincey to “immediately seek the resignation” of Kotick, who currently serves as a member of its board of directors.

While emails addressed to staff members at Xbox, Nintendo, and PlayStation lambasting Activision Blizzard are all well and good, at the end of the day they are not public stances that take Activision to task for their toxic work culture. It’s been an open secret that Activision Blizzard has had toxic leadership well beyond anything currently being litigated, so it feels long overdue that people with power are also taking a stance. Although it is new for treasurers to lean in on a gaming company, there’s precedent. In the past, treasurers have used funding like a carrot on a stick to influence operational changes in companies — like divesting Massachusetts’ pension to address climate change, according to Axios.

Public pressure that affects the bottom line on Activision Blizzard while also threatening structural change speaks truth to power better than an email can. Welcome to the resistance, state treasurers.

Read More: Everything That Has Happened Since The Activision Blizzard Lawsuit Was Filed

Comments

    • I assume settling with the Federal govt for only 18 million dollars, and sabotaging the California case in one foul swoop had a lot to do with it, it proved to the board he had a plan and it worked. Hence he got a full confidence approval.

      Unless there is a shareholder revolt of non-board controlled stock he won’t be moved anytime soon.

      • Nope Bobby Kotick is going to remain as CEO of Activision Blizzard and he won’t be resigning as Activision Blizzard CEO either.
        But in the end Activision Blizzard really need to stop with the excuses and get on with delivering us digital content for Call of Duty Warzone along with Call of Duty Vanguard and Crash Bandicoot 4 It’s About Time which came out for the Nintendo Switch earlier this year as part of Crash Bandicoot’s 25th anniversary and also focus on bringing us our next Crash Bandicoot and Spyro the Dragon console game along with the next Tony Hawk console skateboarding game in the near future as we head into 2022.

Show more comments

Log in to comment on this story!