Will Bobby Kotick survive the Activision Blizzard reckoning?

Activision Blizzard's CEO is under immense pressure to step down amid the ongoing sexual harassment and discrimination crisis.

Man carries sign that says "Fire pedophile Bobby Kotick"

Activision Blizzard CEO Bobby Kotick is now locked in a battle for the future of the company's leadership.

Photo: David McNew/AFP via Getty Images

This story contains a mention of sexual assault.

One of the video game industry's longest-serving and most powerful executives, Activision Blizzard CEO Bobby Kotick, is on thin ice, with calls for his resignation growing louder by the day. But Kotick, who has steered the publisher since the early '90s and made himself and stockholders fabulously wealthy in the process, is refusing to let go of the wheel, setting up a messy showdown unlike any power struggle the industry has seen before.

The crisis at Activision Blizzard took a drastic turn this past week thanks to an explosive investigation from The Wall Street Journal that revealed the extent to which Kotick was aware of the company's rampant sexual harassment and discrimination issues. That includes settling out of court with a former employee who had twice been raped by her manager at Activision-owned studio Sledgehammer Games and keeping the story quiet.

  • The report detailed how Kotick himself has committed misconduct, ranging from threatening the life of an assistant in 2006 to stepping in to protect harassers within the company's top ranks, while also allegedly concealing many of these incidents from the board of directors.
  • Condemnation has been swift. A group of more than 1,000 employees has called for Kotick's resignation. Investment group SOC also said if Kotick and his two longest-serving board members didn't step down, it would refuse to reelect the current directors next year and stage a boycott of the vote with other shareholders.
  • Since the article's publication, Activision's handling of the situation has been nothing short of disastrous. The board said it would stand by Kotick without question, while the company said its new zero-tolerance policy for harassment didn't apply to the executive because accusations against him were over a decade old.
  • Meanwhile, it was revealed that Blizzard co-lead Jen Oneal, who announced her resignation earlier this month, was being paid less than fellow co-lead Mike Ybarra for the same role. "It was clear that the company would never prioritize our people the right way," Oneal wrote in an email to staff in September. "I have been tokenized, marginalized and discriminated against."

The most important revocations have come from Kotick's peers. The heads of both PlayStation and Xbox sent emails to staff this week condemning Activision Blizzard and its handling of the crisis. While Kotick has deftly ignored employee demands with placating gestures like a pay cut, losing the support of platform owners like Sony and Microsoft creates a potentially dangerous situation.

  • Jim Ryan, the head of PlayStation, sent an email to Sony staff on Wednesday where he said the company reached out to Activision immediately after the WSJ report "to express our deep concern and to ask how they plan to address the claims made in the article." Ryan went on to say: "We do not believe their statements of response properly address the situation."
  • A day later, Xbox chief Phil Spencer said he was "disturbed and deeply troubled by the horrific events and actions'' at Activision Blizzard, adding that "this type of behavior has no place in our industry." Spencer said Microsoft would, going forward, have to think about how closely it wants to associate with the publisher.
  • Ryan and Spencer are among the most prominent and well-respected figures in the game industry, and losing their support could mean any number of financial roadblocks for Activision Blizzard going forward. That could include losing marketing partnerships during big E3 keynotes, special deals for in-game promotions in Call of Duty titles or strategic placement in the PlayStation and Xbox digital stores.

The Kotick story has refocused the Activision Blizzard saga. It's been months since California filed its lawsuit against the company, and there were signs the controversy had died down after a federal settlement with the Equal Employment Opportunity Commission and the smooth release of the newest Call of Duty game.

  • But the story has now become about Kotick, and in particular his handling not just of the lawsuit and the revelations it contained, but also his entire stewardship of the company throughout the past three decades.
  • That the leadership and the company's board of directors have fallen in line so quickly behind Kotick has had the effect of galvanizing employee organizing efforts. "It's almost as if they're begging us to unionize," an Activision employee told Axios. "I don't know if I'd be ready to trust corporate again without a union behind me," another said.

How long can Kotick hold on? The company's major shareholders are enormous wealth management funds, including Vanguard, BlackRock and Fidelity, which tend not to get involved in any form of corporate controversy of this kind.

  • It would also be expensive to fire Kotick; as of December 2020, Kotick's contract stipulates a payout of up to $265 million if he is ultimately terminated.
  • Kotick has also run the company since 1991, a year after he purchased a 25% stake of the then-bankrupt Mediagenic and restructured it under its original name as Activision.
  • He's one of the longest-running CEOs in America and has been instrumental in turning the company's games into household names through strategic acquisitions, mergers and buyouts with major companies like Vivendi and Blizzard Entertainment.

The depth and severity of the company's toxic workplace issues now has a face and a name, and it belongs to Bobby Kotick. Whether he thinks he can navigate through this crisis and repair his company's reputation is now up against the board's perception of how much damage he's doing to the company.

Activision's stock is down nearly 10% this week and more than 30% in the past year. And losing the faith of leadership at Microsoft and Sony is perhaps the most damning evidence yet that keeping Kotick onboard could cost more than he's worth.


Musk’s texts reveal what tech’s most powerful people really want

From Jack Dorsey to Joe Rogan, Musk’s texts are chock-full of überpowerful people, bending a knee to Twitter’s once and (still maybe?) future king.

“Maybe Oprah would be interested in joining the Twitter board if my bid succeeds,” one text reads.

Photo illustration: Patrick Pleul/picture alliance via Getty Images; Protocol

Elon Musk’s text inbox is a rarefied space. It’s a place where tech’s wealthiest casually commit to spending billions of dollars with little more than a thumbs-up emoji and trade tips on how to rewrite the rules for how hundreds of millions of people around the world communicate.

Now, Musk’s ongoing legal battle with Twitter is giving the rest of us a fleeting glimpse into that world. The collection of Musk’s private texts that was made public this week is chock-full of tech power brokers. While the messages are meant to reveal something about Musk’s motivations — and they do — they also say a lot about how things get done and deals get made among some of the most powerful people in the world.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.

Circle’s CEO: This is not the time to ‘go crazy’

Jeremy Allaire is leading the stablecoin powerhouse in a time of heightened regulation.

“It’s a complex environment. So every CEO and every board has to be a little bit cautious, because there’s a lot of uncertainty,” Circle CEO Jeremy Allaire told Protocol at Converge22.

Photo: Circle

Sitting solo on a San Francisco stage, Circle CEO Jeremy Allaire asked tennis superstar Serena Williams what it’s like to face “unrelenting skepticism.”

“What do you do when someone says you can’t do this?” Allaire asked the athlete turned VC, who was beaming into Circle’s Converge22 convention by video.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.


Is Salesforce still a growth company? Investors are skeptical

Salesforce is betting that customer data platform Genie and new Slack features can push the company to $50 billion in revenue by 2026. But investors are skeptical about the company’s ability to deliver.

Photo: Marlena Sloss/Bloomberg via Getty Images

Salesforce has long been enterprise tech’s golden child. The company said everything customers wanted to hear and did everything investors wanted to see: It produced robust, consistent growth from groundbreaking products combined with an aggressive M&A strategy and a cherished culture, all operating under the helm of a bombastic, but respected, CEO and team of well-coiffed executives.

Dreamforce is the embodiment of that success. Every year, alongside frustrating San Francisco residents, the over-the-top celebration serves as a battle cry to the enterprise software industry, reminding everyone that Marc Benioff’s mighty fiefdom is poised to expand even deeper into your corporate IT stack.

Keep Reading Show less
Joe Williams

Joe Williams is a writer-at-large at Protocol. He previously covered enterprise software for Protocol, Bloomberg and Business Insider. Joe can be reached at JoeWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.


The US and EU are splitting on tech policy. That’s putting the web at risk.

A conversation with Cédric O, the former French minister of state for digital.

“With the difficulty of the U.S. in finding political agreement or political basis to legislate more, we are facing a risk of decoupling in the long term between the EU and the U.S.”

Photo: David Paul Morris/Bloomberg via Getty Images

Cédric O, France’s former minister of state for digital, has been an advocate of Europe’s approach to tech and at the forefront of the continent’s relations with U.S. giants. Protocol caught up with O last week at a conference in New York focusing on social media’s negative effects on society and the possibilities of blockchain-based protocols for alternative networks.

O said watching the U.S. lag in tech policy — even as some states pass their own measures and federal bills gain momentum — has made him worry about the EU and U.S. decoupling. While not as drastic as a disentangling of economic fortunes between the West and China, such a divergence, as O describes it, could still make it functionally impossible for companies to serve users on both sides of the Atlantic with the same product.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Latest Stories