After an August protest in which hundreds of workers for the gaming giant Activision Blizzard walked out after management was dismissive of a California state lawsuit, the company has made moves to correct its missteps in culture. The Santa Monica-based company was described in the lawsuit as having a “pervasive ‘frat boy’ workplace culture” which management initially called “irresponsible” and “inaccurate,” but chief executive officer Bobby Kotick has since acknowledged that the response to those allegations was “tone deaf” and has committed to tackling the allegations of widespread gender-based discrimination and harassment.
20 employees have been fired as a result of a months-long investigation headed by Activision Blizzard’s chief compliance officer Frances Townsend. A former U.S. Homeland Security adviser Townsend joined the company in March of 2021 and noted that while she could not legally name any of the individuals who left the company as a result of the disciplinary action, the misconduct was found across several parts of the business and the group included several game developers as well as a few supervisors.
Founded in 1979 by former Atari game developers, Activision was the first independent, third-party console video game software developer and distributor and has since built one of the largest portfolios of recognized brands. Launching a series of games in the early 1980’s for the Atari 2600, the company found success in games such as Kaboom! which was its first game to sell over a million units, and Pitfall! which sold more than four millions copies. Just four years later Activision’s total sales were estimated at $157 million and revenues at $60 million, with 60 employees working for them.
In 1991, Activision (then known as Mediagenic) was purchased by American businessman Bobby Kotick alongside additional investors. Becoming chief executive officer of the company upon its purchase, Kotick reincorporated the company in Los Angeles, California and revitalized the business through restructuring efforts, taking the company back to its original Activision name. Turning the company away from decline, the company saw four consecutive years of 50 percent growth in revenues while remaining break-even and began to develop successful games such as Heavy Gear which helped turn the company toward profitability.
Between 1997 and 2008, Activision began to acquire other video game development studios, broadening their video game portfolio and subsequently developing hits such as the Tony Hawk’s series, the Call of Duty franchise, and the Guitar Hero series each bringing in billions of dollars in revenue. In 2008 Activision merged with the French media conglomerate Vivendi Games who owned Blizzard Entertainment and its highly successful massive multiplayer online game World of Warcraft. Becoming Activision Blizzard, it has since gone on to move into social gaming, acquiring the company King and with it the wildly popular Candy Crush Saga.
The strategic acquisitions and game development of Activision Blizzard has seen the company today become one of the leading worldwide developers, publishers and distributors of interactive entertainment and leisure products for various consoles, handheld platforms and the PC. The business operates in more than 15 countries and is a member of the Fortune 500 and S&P 500 –– one of the only gaming companies in the world to do so.
For five consecutive years Activision Blizzard was named one of FORTUNE’s “100 Best Companies to Work For,” making the recent allegations of poor culture even more of a shock. However, with the California case remaining ongoing and the Securities and Exchange Commission opening up an investigation into the discrimination claims, Activision Blizzard has been working diligently to remedy internal affairs. The company recently sent a letter to staff saying that in addition to the firings it had also reprimanded 20 individuals and intends to expand its ethics and compliance team considerably, who have been tasked with creating a more accountable workplace.
According to Townsend, while none of the firings were from the company’s board they have been direct in their reviewal process and not factored business impact into their decision-making. Regardless of rank or title, they have sought to identify both instances of misconduct and leaders who tolerated a culture that was inconsistent with the company’s values. “We call it as we see it,” she said, while identifying that a key factor was making the distinction between patterns of misconduct that warranted termination and instances that were isolated and could potentially be rectified with training.
In her investigation, Townsend found that the majority of misconduct happened outside of the office at unofficial gatherings, and alcohol was a common denominator. Regardless of the location though, Activision Blizzard has indicated that they are aware that the ramifications of such misconduct will still extend to the workplace, requiring action on their part. Emphasizing the importance that their employees feel their voices will be heard, the $60 billion gaming company said in the recent letter to their employees that they needed to act “with a renewed urgency.” In addition to the firings and reprimanding of individuals, Activision Blizzard has said it intends to triple its investment into training resources in addition to hiring 19 full-time roles for its ethics and compliance team.
When the employees walked out in August, they made four demands that they felt would be significant strides in repairing the company’s culture, including “company-wide” efforts to expand diversity and inclusion, transparency over gender pay equity, and ending mandatory arbitration clauses in all employee contracts. While these had not yet been fully met, Townsend has said that the company is willing to put every resource at its disposal toward reorienting the company culture and further changes are anticipated once proper planning and preparation has been accomplished.
It is one thing for a company to acknowledge that steps need to be taken to correct course when employees indicate there has been a deterioration in culture. However, acknowledging is only part of the battle, and that acknowledgement must be followed up with swift and decisive action in order to regain trust. While much remains to be seen in the future, Activision Blizzard appears to be willing to put in the work.
