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#MeToo comes for the video game industry

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Good morning! This Friday, California sues Activision Blizzard alleging harassment, Zuck has the metaverse on his mind, tech helps China with disasters and how to enjoy the Olympics from your phone.

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The Big Story

The video game industry's reckoning

Activision Blizzard is among the largest video game makers in the world, responsible for Call of Duty and countless other multi-billion-dollar series. The California-based company is also now the subject of a lawsuit from the state's Department of Fair Employment and Housing, which alleges Activision Blizzard perpetuated a toxic workplace culture that involved serial sexual harassment of women and systemic pay discrimination.

The DFEH's findings come from a two-year investigation made public in a lawsuit filed in a Los Angeles court on Tuesday. The lawsuit seeks an injunction forcing Activision's compliance with California workplace protections, in addition to unpaid and lost wages, back pay and benefits for female employees.

The lawsuit contains harrowing accusations of misconduct. Activision is accused of fostering a "frat boy" workplace culture that created a "breeding ground for harassment and discrimination against women." In one horrific case, a female employee died by suicide on a work trip after enduring harassment from her male superior.

  • Female employees were subjected to "constant sexual harassment, including having to continually fend off unwanted sexual comments and advances by their male co-workers and supervisors and being groped at the 'cube crawls' and other company events," the lawsuit reads.
  • Pay discrimination and unfair treatment is rampant, especially at Activision subsidiary Blizzard Entertainment, the lawsuit alleges. Male employees were allegedly promoted more often, paid more on average and were often given freedom to play video games at work and delegate tasks to female direct reports.
  • Women of color were "particularly vulnerable targets" for discrimination, the lawsuit says, with some employees recounting extreme micromanagement and wait times extending years for promotions. Meanwhile, male colleagues hired much later received promotions earlier and enjoyed more workplace freedom, the suit alleges.
  • Blizzard's president, J. Allen Brack, emailed staff and described the situation as "extremely troubling." He promised that the company's leadership would meet with staff "to answer questions and discuss how we can move forward."

It's just the latest #MeToo reckoning for a major game industry player. Over the last few years, current and former employees at game studios have become much more vocal about a range of issues in the industry, from chronic unpaid overtime (known as "crunch") to toxic workplace cultures fostering sexism and harassment.

  • Assassin's Creed creator Ubisoft has become the public face of workplace toxicity in the game industry, with scores of reports implicating the highest levels of the French publisher's leadership. Numerous Ubisoft executives and game developer leads have resigned or been fired over reports of harassment and misconduct, and the company is still grappling with legal fallout and an exodus of top talent.
  • Riot Games, the studio behind megahit League of Legends, has been another focal point of the game industry's #MeToo moment following a 2018 Kotaku investigation detailing its culture of sexism and harassment. The company, accused of similarly fostering a sexist "bro" culture, is also still dealing with ongoing lawsuits and settlements with state regulators.

One common theme in all these cases is a lack of diversity. The video game industry is still overwhelmingly white and male, and much more so than its counterparts in Silicon Valley and Hollywood. Just 24% of game developers are women, and just 2% are Black, according to data collected last year by the International Game Developers Association.

Activision's official response doesn't outright deny any of the specific allegations. Instead, Activision says it's changed and that the DFEH's lawsuit includes "distorted" descriptions of "Blizzard's past."

  • Activision has decided to target the DFEH, accusing it of "disgraceful and unprofessional" behavior by not informing it of its findings and filing a lawsuit instead.
  • The company rattled off a list of changes it's made to address workplace issues, but it ends its statement with a defiant line: "It is a shame that the DFEH did not want to engage with us on what they thought they were seeing in their investigation."

The video game industry is notoriously litigious and secretive, relying on nondisclosure and nondisparagement agreements and arbitration clauses in developer contracts to muzzle employees and resist change.

But a growing pro-labor movement within the industry, combined with female game developers speaking out about misconduct, has begun to chip away at the game industry's pervasive and rotten workplace issues. This may be among the most high-profile challenges to one of gaming's biggest corporations, but it will surely not be the last.

— Nick Statt (email | twitter)

If you or a loved one needs help regarding sexual harassment or violence, call RAINN's sexual assault hotline at 1-800-656-4673. If you or a loved one needs help regarding thoughts of suicide, call the National Suicide Prevention Lifeline at 800-273-8255.

A MESSAGE FROM ALIBABA

People are often surprised to learn that Alibaba has thousands of customers here in America, made up of U.S. brands, retailers, small businesses and even farmers. Last year, U.S. companies sold more than $54 billion worth of their high-quality products directly to Chinese consumers on our e-commerce platforms.

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People Are Talking

Mark Zuckerberg says the metaverse has always been on his mind:

  • "I've thought that this would be the holy grail of social interactions from well before when I started Facebook."

He also hit back at Joe Biden for saying vaccine misinformation on Facebook is harmful:

  • "It's tough to say that anyone was well prepared for the pandemic, but I think we'd built a lot of systems that I think could really come in handy on this. And overall I'm quite proud of how we've shown up and what I think our net impact has been here."

There's a chip shortage now, but SVolt Energy Technology's Yang Hongxin says batteries are up next:

  • "When the chip shortage is over, the major supply shortage the industry faces would be batteries. The production capacity of battery cells will be tight in the next few years because expansion takes time."

Making Moves

Faraday Future hit the public market, with the help of a SPAC that pumped $1 billion into the company. It's been a wild ride for Faraday, which is climbing out of debt.

Matterport is also getting SPAC'd. The 3D mapping startup is merging with Gores Holding in a deal valued at $2.9 billion.

Uber Freight bought Transplace, a transportation logistics company, for $2.25 billion.

HashiCorp's Mitchell Hashimoto resigned as co-CTO. He'll still stick with the company as a solo contributor.

Mark Stucky, Virgin Galactic's flight test director, is leaving the company. He said he left "not on my own timeline."

A group of lead developers at Gearbox are leaving. Scott Kester, Christopher Brock, Keith Schuler, Paul Sage, Chris Strasz and Kevin Penrod are all heading out to work on a separate project together, according to Axios.

TechNet's executive council has two new members: Coursera's Jeff Maggioncalda and General Motors' Craig Glidden. Coursera is now also a member of TechNet.

In Other News

  • Some back-to-work updates: Twitter will take an asynchronous approach, while DoorDash and Etsy are adopting hybrid work plans.
  • On Protocol: SPACs are so Q1. But there are plenty of other takeaways from a disorienting year in tech IPOs, too. Allow us to explain.
  • Lawmakers are swinging at social media again: Two Democrats introduced a bill that would create an exception to Section 230 if a platform promotes COVID-19 misinformation.
  • Instagram is testing an anti-harassment tool, called Limits, which would allow users facing abuse to temporarily lock down their accounts. The company announced the feature weeks after racist comments flooded three English soccer players' pages.
  • Zomato had a huge IPO pop. It's a good sign for the other Indian companies waiting to go public.
  • China's very, very mad at DiDi. Bloomberg reported that authorities view its IPO last month as a challenge to the government's authority, and are considering "perhaps unprecedented" penalties.
  • Instacart is building warehouses to grow its grocery delivery service. In the next year, the company plans to use robots that will grab items from the warehouses, and workers will package and deliver them to customers.
  • On Protocol | China: Tech is helping China handle disasters. Residents are crowdsourcing relief efforts on spreadsheets, using social media to call out for — and provide — assistance, and receiving cell signal through drones in flood-ridden towns.
  • On Protocol | Workplace: More Black employees are working for Uber this year than in 2020. Still, the number of Black and Latinx employees in leadership roles is tiny.

One More Thing

Your Olympics essentials

The Olympics are finally here. You might be able to catch some of the games on TV, but if you're on the go, there are other ways to make sure you stay in the loop.

  • An app: Olympics. This one sounds obvious, but the app is the best way to get schedules and updates for the Olympics and Paralympics. Plus, you can tweak your settings to only get notifications about the things you care about.
  • A podcast: Off the Podium. At one point in your childhood, you probably thought you'd go to the Olympics. The hosts running this podcast still have those dreams, but they channeled that energy into a talk show about the games.
  • A newsletter: Very Olympic Today. This Sports Illustrated newsletter offers daily news on the Olympics and suggests other stories you can read to learn more about the games.

A MESSAGE FROM ALIBABA

Think of Alibaba as a massive digital mall. When a U.S. business opens a digital storefront on Alibaba's platform in China, they gain access to our 900 million active Chinese consumers. Alibaba provides all the tools to help U.S. businesses build their brands in China to serve local Chinese consumers.

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