Activision’s CEO Is Embattled by Staff and Investors

Investors’ concerns are mounting over the direction of Activision Blizzard Inc. under Chief Executive Officer Bobby Kotick, and a group of employees say it’s time for him to step down.

The company, known for hit video games like Call of Duty and World of Warcraft, has been in turmoil since the summer, when it was sued by California’s Department of Fair Employment and Housing over allegations of sexual harassment, unequal pay and retaliation. The agency described a “frat boy culture” at the company and accused leadership of failing to take action. Kotick’s plight worsened when the U.S. Securities and Exchange Commission later launched its own investigation into how the company handled the reports of misconduct.

The scandal has taken a toll on a company already struggling to adapt to the end of a pandemic-fueled video game boom. Earlier this month, Activision delayed two of its most anticipated games and gave a sales forecast for the fourth quarter that fell short of Wall Street’s expectations, sending the shares plunging the most in 13 years. Activision’s missteps allowed Roblox Corp., which began trading publicly earlier this year, to surpass it in market value, becoming the biggest U.S. video game company by that measure.

And that was before Tuesday, when the situation got even tougher for Kotick. Explosive revelations by the Wall Street Journal tie the CEO to allegations of mistreatment of women and suggest that he was aware for years of sexual misconduct, including rape, at the company but didn’t report it to the board. The newspaper cites interviews, company emails, regulatory requests and other internal documents in its reporting.