Protocol Source Code
What matters in tech, in your inbox every morning.
Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

The Activision Blizzard storm rages on

Activision Blizzard logo

Good morning! This Wednesday, Activision Blizzard is in crisis mode, Microsoft is requiring vaccinations, and Facebook's fight with researchers is heating up.

(Was this email forwarded to you? Sign up here to get Source Code every day.)

The Big Story

Activision Blizzard is scrambling

As Activision Blizzard's workplace crisis rages on into its third week, the company is trying to try to calm the storm — to little avail. Blizzard President J. Allen Brack, who took the reins back in 2018, resigned yesterday. He's to be replaced by Jen Oneal and Mike Ybarra, who will co-lead the studio in a power-sharing agreement some believe further solidifies CEO Bobby Kotick's control over the subsidiary.

Nowhere in Blizzard's statement about Brack's departure does it mention California's explosive sexual harassment and discrimination lawsuit at the heart of the saga. The lawsuit, filed last month, resulted last week in a 500-person walkout at Blizzard's headquarters in Irvine. (Among the attendees? None other than Ybarra, the new studio co-head.)

Activision Blizzard so far appears uncommitted to lasting change. The company has made numerous empty gestures aimed at placating employee concerns and salvaging a falling stock price. Many of them seem self-serving.

  • Company management offered employees paid time off to participate in the walkout, giving it an air of corporate sponsorship that walkout organizers were specifically trying to avoid. Meanwhile, the company has hired a law firm known for its union-busting efforts. Walkout organizers, now calling themselves the ABK Workers Alliance, have since released a statement condemning the hiring of WilmerHale.
  • Controversies surrounding Fran Townsend, the company's EVP for corporate affairs, continue to pile up. In the wake of the lawsuit, Townsend sent an email to employees dismissing the allegations as "meritless" and "untrue." The executive then tweeted an Atlantic story criticizing whistleblowers and began blocking Activision Blizzard employees for sounding off in her replies.
  • Kotick sent a letter to employees last week in which he called the company's initial defensive response to the lawsuit "tone deaf," but only did so after the company's stock price began tumbling. Activision Blizzard shares are down more than 15% since early July.

Stories of misconduct continue to pour out. The initial wave of revelations following news of the lawsuit involved shocking stories, including the so-called "Cosby suite" of disgraced former Blizzard creative director Alex Afrasiabi. Now, as more in the industry continue to speak out, we're starting to see the fuller picture of toxic rot at the heart of Activision Blizzard's culture.

  • An Activision IT worker admitted in 2018 to installing spy cameras in the women's bathroom in the company's Minnesota office. The employee, Tony Ray Nixon, pleaded guilty to a misdemeanor privacy violation.
  • Security engineer Emily Mitchell said at Black Hat 2015 that she was mocked and harassed by Blizzard employees at the company's own booth, in which she was asked whether she "liked to be penetrated," according to Waypoint. Black Hat has since banned Blizzard from sponsoring the conference.
  • A shocking IGN report detailed how male Blizzard employees would often walk into the office's breastfeeding rooms without knocking and refuse to leave until asked. The company later put locks on the doors.

Activision Blizzard addressed the ongoing crisis in its Q2 2021 earnings report and investor call yesterday. "Our work environment, everywhere we operate, will not permit discrimination harassment or unequal treatment. We will be the company that sets the example for this in our industry," Kotick said in the opening of the call.

  • The company released a statement as part of its earnings report titled "Commitment to a Safe Work Environment," and California's lawsuit was added to its list of risk factors: "If we experience prolonged periods of adverse publicity, significantly reduced productivity or other negative consequences relating to this matter, our business likely would be adversely impacted."
  • Just before the call, Bloomberg reported that Jesse Meschuk, the company's SVP of global human resources, is no longer with the company.
  • Activision Blizzard was also hit with a class-action lawsuit yesterday over its failure to disclose its ongoing sexual harassment and discrimination issues, Kotaku reported.

Despite sorrowful apologies from former company leaders, current management at Activision Blizzard has been tight-lipped. When execs have spoken out, they've often been combative and dismissive. That's beginning to change, as we saw on the investor call. But the company has yet to acknowledge any of the demands made by organizers of last week's walkout, including an end to the forced arbitration agreements that have helped guard many of the company's worst workplace abuses.

Perhaps Activision Blizzard management hopes this will all blow over in time to announce this year's Call of Duty game later this summer. But that's wishful thinking. There's no indication the storm is subsiding, and employees who attended last week's walkout now say, "This is the beginning of an enduring movement."

— Nick Statt (email | twitter)

A MESSAGE FROM FACEBOOK

2021 is the 25th anniversary of the Telecommunications Act of 1996, the last major update to internet regulation. It's time for an update to set clear rules for addressing today's toughest challenges. See how we're taking action on key issues and why we support updated internet regulations.

Learn more

---

Join Protocol's Biz Carson for a conversation with Atomic's Swathy Prithivi, Accel's Rich Wong and Asana's Oliver Jay during our upcoming event: Going Global: How Tech Companies Can Expand Internationally August 10 at 9 a.m. PT / 12 p.m. ET Learn More

---

People Are Talking

Silicon Valley is driving a huge societal change, VC investor Marc Andreessen says:

  • "Society is going through a technological transformation. You have these new tech companies driving this change and realizing the benefits."

Don't think YouTube is just now getting on the creator pay bandwagon, Chief Product Officer Neal Mohan says:

  • "There's a lot of conversation today about the new creator economy. That's almost become a buzzword. I think sometimes people lose sight of the fact that YouTube has been in the creator economy business for over a decade."

Microsoft's Windows 365 launch went ... a little too well, Microsoft's Scott Manchester said:

  • "We have seen unbelievable response to Windows 365 and need to pause our free trial program while we provision additional capacity."

On Protocol | Workplace: Companies have the power to change the wage gap issue, career coach Ariel Lopez says:

  • "I do believe the crux of the issue and what we're looking at has everything to do with companies and their lack of fair, efficient and inclusive processes as it pertains to hiring, and also as it pertains to retention."

Making Moves

Hydrow is eyeing an IPO. The company is talking with a SPAC to merge in a deal that would be valued at more than $1 billion.

Nykaa also wants to go public. The Indian ecommerce company filed for an IPO in a deal that could value it at more than $4 billion, according to Bloomberg.

Zedge acquired Emojipedia. Jeremy Burge, the founder of Emojipedia, will work for the smartphone software company.

Vishnu Nambiar is Carsome's next chief technology officer. He previously worked as the chief information officer at AirAsia and held roles at IBM and Microsoft.

Ashley Higgins is Product Hunt's new CEO. She was previously the company's general manager, and before that she worked at Reddit, Clearbit and Sega.

Heather Gagnon is the next chief people officer at Entrada. She's worked at the company for 10 years , most recently serving as the VP of human resources.

Nathaniel Crook is the new chief revenue officer at Instabase. He previously worked on partnerships and strategic accounts at Microsoft.

In Other News

  • On Protocol | Workplace: Remote work policies are getting more flexible. Asana and LinkedIn are extending their employees' remote work time, while Twitter is getting serious about asynchronous work. Google, meanwhile, approved 85% of employee requests to relocate or work remotely.
  • Microsoft will require proof of vaccination from its employees, vendors and office visitors before they can go back to the office next month. It's following Facebook and Google in the move.
  • Facebook disabled NYU researchers' accounts. It said the NYU Ad Observatory was scraping data in violation of Facebook's terms of service, escalating a long-running battle between platforms and academics.
  • A group of companies want an independent contractor vote in Massachusetts next year. Like California's Proposition 22, companies including Uber and DoorDash are backing a measure that would define their workers as contractors, not employees.
  • Facebook is trying to study encrypted data. The company is piecing together a team of AI researchers who can analyze encrypted data without decrypting it, according to The Information, which could allow Facebook to target ads on WhatsApp.
  • On Protocol: As competition dwindles, internet gets way more expensive. A consumer survey shows that people who live in areas with more broadband providers generally pay less than those with fewer options.

One More Thing

Streaming TikTok above the clouds

Nothing helps pass the time like ... aimlessly scrolling through 65,000 TikToks. American Airlines knows this, and is letting people get free 30-minute increments of TikTok streaming during flights. If you don't have the app already downloaded, you can still access it for free to take advantage of this promotion. Nothing like a cold beverage, a window seat and 2-minute bursts of people singing all the harmonies to "Grace Kelly" to get you through a long flight.

A MESSAGE FROM FACEBOOK

It's been 25 years since comprehensive internet regulations passed. See why we support updated regulations on key issues, including:

  • Protecting people's privacy
  • Enabling safe and easy data portability between platforms
  • Preventing election interference
  • Reforming Section 230

Learn more

Refer Five Friends, Get A Mug

Are you tired of explaining the tech news of the day to your co-workers every morning? Let us do the heavy lifting and refer them to Source Code.

Send them your referral link via Slack, text, email, or carrier pigeon and we'll send you your very own Protocol mug after you refer five friends!

Your referral link: *|RH_REFLINK|*

Share on TwitterShare on LinkedInShare via email

Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

Recent Issues