Activision Blizzard CEO Bobby Kotick will officially step down on December 29.
Going forward, Microsoft Gaming CEO Phil Spencer will oversee Activision Blizzard. Some of Activision’s leadership remains in place, though in the same email announcing the news, Spencer detailed several personnel changes. In the coming months, Lulu Meservey, chief communications officer, who joined in October 2022; and Humam Sakhnini, vice chairman at Blizzard and King, who oversaw the King merger; will also depart the company.
“These changes will provide the clarity and accountability that is necessary to achieve our ambitious goals and foster a culture that is welcoming, empowering, and committed to gaming for everyone,” Microsoft executive Phil Spencer wrote to employees in an email viewed by Inverse. The email’s subject line is titled, “Saying farewell to Bobby Kotick, aligning ABK with Microsoft Gaming.”
Kotick, one of America’s highest-paid executives, shared the announcement with his employees on Wednesday, giving them a little less than two weeks’ notice. According to financial filings, Kotick is expected to walk away with a payout of several hundred million dollars.
“Bobby Kotick should have left Activision two years ago when over 1,800 of us publicly asked him to step down, but better late than never,” a current Activision Blizzard employee tells Inverse in response to Wednesday’s announcement. The employee spoke under the condition of anonymity because they were not authorized to speak publicly about company operations. They added: “Working for Microsoft seems like it’s going to be better in every possible way than what we’re used to. It’s surreal.”
“Bobby Kotick should have left Activision two years ago when over 1,800 of us publicly asked him to step down, but better late than never.”
Video game industry onlookers had been buzzing about his potential departure ever since Microsoft initially announced it was considering acquiring Activision Blizzard back in January 2022.
“Kotick’s departure gives Xbox a chance to counteract the bad habits that have characterized the publisher’s company culture,” Joost van Dreunen, an adjunct assistant professor focusing on the business of games at the New York University Stern School of Business, tells Inverse. “Despite Activision Blizzard’s broad portfolio, it relies for more than 80 percent of revenues on Candy Crush, Call of Duty, and Warcraft. Such a high dependency on the success of one or only a few franchises has inspired unusual labor practices, uncommon incentive structures, or even turning a blind eye to harmful working conditions in pursuit of profitability at Activision Blizzard.”
Activision Blizzard’s sale has been described as a quick handling of a troubled asset. California’s Civil Rights Department, formerly the Department of Fair Employment and Housing, sued Activision Blizzard in 2021, alleging a “frat boy” culture where women faced sexual harassment and discrimination. Activision settled the suit for $55 million, and California state dropped the discrimination claims. To resolve the California state suit, Activision Blizzard will pay around $45 million into a fund to be split among women who worked for the developer between October 2015 and December 2020. An additional $10 million will cover the CRD’s legal fees. Activision Blizzard is still facing a lawsuit brought by Lisa Bloom, an attorney who has represented eight women in separate sexual harassment claims.
In the settlement agreement, the CRD acknowledges that no investigation “has substantiated any allegations that there has been systemic or widespread sexual harassment at Activision Blizzard” or found that the company’s board of directors or Kotick acted improperly.
“All eyes are now on Microsoft.”
Last year, the video game publisher faced a U.S. Securities and Exchange Commission investigation, a class-action lawsuit from shareholders, and unfair labor practices complaints by workers.
In January 2022, employees asked Kotick during an internal all-hands meeting if he would stay on as CEO if Microsoft and Activision closed their deal.
“This is a company that I’ve now been here for 31 years, and there is nothing more important to me, other than my children, than this company,” he responded. “I can tell you that my commitment to the company is [to] remain in my role. Once the deal closes, what I’ve committed to Microsoft is I will stay as long as is necessary to ensure that we have a great integration and a great transition.”
Microsoft closed the $69 billion deal to acquire Activision Blizzard in October.
Kotick wrote to employees on Wednesday reflecting on his love of Atari games that eventually led to a 32-year tenure at Activision Blizzard. “You could not be in better hands,” he stated.
But despite Kotick’s departure, the saga of Activision Blizzard is far from over.
“All eyes are now on Microsoft and how it manages to execute the integration of its new asset and clean it up,” NYU’s van Dreunen says. “Kotick gets a new yacht, Microsoft gets its prize, and, hopefully, the rest of us can play knowing our games weren’t developed at the expense of others.”
