Amid regulatory investigations and ongoing sexual harassment and discrimination lawsuits, Activision CEO Bobby Kotick sat down with Variety to address the company’s embattled position in 2023.
In a piece by Variety’s Cynthia Littleton, readers are privy to a seemingly more accessible Kotick since his last public interview in 2012. Littleton’s piece spans several topics with insight from Kotick on items such as Activision’s bid to buy Time Warner, the company’s promise to release a transparency report following its EEOC investigation, Kotick believing labor unions are at the heart of its harassment and discrimination claims, the confluence that led to Microsoft’s acquisition bid and future competition fears.
A large portion of the two-hour Kotick interview focused primarily on the “frat house” claims strewn about during its five year-long harassment and discrimination cases, with plaintiffs accusing the CEO of “failing to act to address internal culture issues, particularly at the Blizzard unit.”
While Kotick deflects blame for seemingly toxic environments employees are alleging that included sexual harassment, groping, comments, and advances as well as a company culture that paid women less than men and assigned them lower-level jobs regularly, he defends his position explaining that, “I wouldn’t be sitting here talking to you if any of what you read in the inflammatory narrative was truthful. No board of directors in a noncontrolled company is going to allow the CEO of an enterprise to stay running the enterprise if those things were truthful.”
With that being said, the Equal Employment Opportunity Commission (EEOC) settled an Activision investigation into similar harassment and discrimination claims in 2021 for $18 million.
The negative PR from protestors, employees, and recent litigation is also what Kotick partially attributed to an eventual deal with Microsoft. Aside from the bad press, in 2021 Activision’s stock dropped nearly 35% following the negative headlines as well as the company reporting delayed games and middling sales and reviews of the latest Call of Duty title, Microsoft’s acquisition bid was a light at the end of long tunnel for Kotick at the time.
While Activision stands in a much stronger position now in mid 2023, Kotick seems still committed to shepherding the Microsoft deal through and believes it’s not only the best move for the company but could be a harbinger for future US-based competitive innovation.
Regarding the regulatory push back from the US Federal Trade Commission (FTC) and the UK’s Competition and Markets Authorities (CMA), Kotick fears a rejected deal could set back the US when attempting to keep pace with non-US tech firms dedicating thousands of engineers and R&D into mobile gaming and streaming technologies.
In his view, the real threat is that U.S. firms fall behind not only China’s Tencent, ByteDance and Alibaba but also Japan’s Sony and Nintendo as leaders and innovators in the AI, streaming and mobile technologies needed to power the next generation of immersive video games. The non-U.S. tech giants have tens of thousands of engineers focused on research and development in these emerging arenas.
Fortunately, for Activision there still some chess moves to be made if the Microsoft deal is squashed, as the company rounds the corner on some of its harassment and discrimination cases, mends its relationship with the CWA and labor unions, and potentially adds $3B of Microsoft’s dollars to its current $12.6B cash-on-hand war chest.
However, after nearly three decades at the Activision helm, it appears Kotick is looking to land somewhere else, and do something else with a nice golden parachute from Microsoft while also handing off the company he revived from the brink of bankruptcy, to a steward of the gaming community like Microsoft.
Kotick will be laser focused on July 18, 2023 and August 2, 2023 as dates that alter the trajectory of Activision going forward, with the 18th opening the window of extensions from Microsoft to continue forward with the acquisition bid and the 2nd being Activision’s showdown with the FTC over approval.