Interview Synopsis

Activision Blizzard – cultural improvements & strategic outlook

  • Public Equity
  • TMT
  • North America

Microsoft’s USD 75bn bid for Activision Blizzard, announced last Tuesday, has sent shock waves through the gaming and tech industry. In one fell swoop, Microsoft could own one of the biggest creators of interactive entertainment, adding blockbuster games like Call of Duty, Candy Crush and World of Warcraft to its roster - in what some have described as one of the “defining deals for the next era of consumer technology”.*

Can Microsoft change “frat boy” culture at Activision Blizzard?

As analysts begin to dissect the implications of this deal, attention has already turned to its potential impact on the culture of Activision Blizzard. The company has in recent years been accused of promoting a “pervasive ‘frat boy’ culture” that allegedly discriminates against women in pay and promotion. In an Interview with Third Bridge Forum on January 13, a former executive at Activision Blizzard told us that leadership isn’t handling these accusations well enough and has reached a “pivotal point” in solving them. 

The specialist said that while it is “positive” that these accusations are being voiced, there continues to be a “backlash” at the company as senior leadership fails to address such claims. The resignation of Blizzard co-leader Jen Oneal in November last year was a “big blow” for the company’s aspirations to become more inclusive, and highlighted problems within a leadership team that has “created a sense of discord within the organisation”.

We heard that the impact of these accusations are already beginning to contribute to employee churn in expert positions, with the specialist highlighting the loss of Byron Beede, former EVP and general manager for Call of Duty, moving to EA Games as an example. There is a dearth of data scientists and digital marketers in the gaming industry, and the specialist warned Activision Blizzard is “struggling” to attract them because of its current culture. 

Improving the culture at the company will not be easy given it operates in an industry that, we heard, is still largely male-dominated and where cases of harassment have existed historically. But the specialist highlighted three areas that they believe are “critical” in helping it regain trust. These are: systematic changes to promotions and opportunities, taking action when accusations are raised, and a change in leadership. 

The specialist we spoke to argued it was crucial that CEO Bobby Kotick be removed, as this  would show the board is “serious” about changing the culture of the organisation. Speculating on who should replace him, the specialist suggested someone from outside of the gaming industry such as a leader from social media, cryptocurrency or the meta universe, given how gaming is evolving to incorporate these areas.

However, the specialist warned Kotick would be “difficult” to replace given his involvement in growing Activision Blizzard to the point that it now sits on the cusp of being sold as part of the biggest gaming deal in history. 

To access all the human insights in Third Bridge Forum’s Activision Blizzard – cultural improvements & strategic outlook Interview, click here to view the full transcript.

* FT

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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