This Week in Business is our weekly recap column, a collection of stats and quotes from recent stories presented with a dash of opinion (sometimes more than a dash) and intended to shed light on various trends. Check back every Friday for a new entry.
Activision Blizzard is getting ready to hold its annual meeting of stockholders next week, and that means everyone owning stock in the company can vote on the board of directors, the executive compensation plan, and a handful of measures proposed by other shareholders.
Today we're focusing on one of those proposals, Proposal 6, submitted by the AFL-CIO Equity Index Funds, the investment arm of America's largest union group (which the Activision Blizzard QA unionizing Communication Workers of America is affiliated with). So it's not terribly surprising to learn the group is proposing a commitment to non-interference when employees try to unionize.
Earlier this month, corporate governance specialist Glass Lewis weighed in on the proposals before Activision Blizzard, and suggested that shareholders side with the company on most issues. But it contradicted management's advice on Proposal 6.
Activision Blizzard said it has "a demonstrated history of good faith collective bargaining"
QUOTE | "[A]llegations of anti-union activity can cause significant reputational harm and result in regulatory or legal risk for companies perceived as thwarting employees' attempts to collectively bargain or associate. We believe that taking steps to allay potential controversies of this nature could benefit the Company and could mitigate potential risks, and we believe that adoption of this resolution could be one such step." – Part of Glass Lewis' reasoning for supporting the proposal.
To my mild surprise, Activision Blizzard's response went a little bit further than the generic corporate statement along the lines of, "The Company begrudgingly acknowledges its employees have a legal right to be disloyal ingrates, uh… we mean unionize."
QUOTE | "The proposal states that collective bargaining is a human right, and we agree with that statement. We are deeply committed to a fair and good faith approach to labor relations and respect the rights of all employees to decide for themselves whether union representation is right for them, with the freedom to make that decision in private and confidentially." – Activision Blizzard, trying to see if you can guess the next word.
QUOTE | "But…" – The next word.
Activision Blizzard argues that the proposal "introduces unnecessary risk to shareholders" because anyone can file a complaint with the National Labor Relations Board regardless of whether or not the company has a policy on unionization, and they could file allegations of violating the policy even if there is no actual allegation of unfair labor practices. (Heaven forbid the company should hold itself to anything but the lowest standard legally permitted.)
It even says the proposal would have no benefit to employees, because it "strongly supports employee freedom of association and has a demonstrated history of good faith collective bargaining."
This is the same Activision Blizzard accused of retaliating against employees trying to unionize and threatening staff for discussing wages and working conditions, among other things. The National Labor Board found merit to a number of those complaints, but Activision Blizzard said in its response to Glass Lewis that the union withdrew some of them so they shouldn't count as evidence of operating in bad faith.
QUOTE | "[Communication Workers of America] withdrew three Unfair Labor Practice charges filed against Activision Blizzard that concerned company interference with and surveillance of protected concerted activity. The NLRB had found merit with these charges. Activision Blizzard agreed to post a company-wide notice informing workers of their right to join a union and to rescind disciplinary action that was taken against one of the workers." – A representative with the CWA explains to us that Activision Blizzard wasn't cleared of wrongdoing; it just struck a deal to make the charges go away.
I guess by Activision Blizzard's logic, its $18 million gender discrimination settlement with the Equal Employment Opportunity Commission is proof there was never any gender discrimination at the company in the first place.
If all this is just an elaborate frame-up job by the union, it's a damn good one
Keep in mind, Activision Blizzard CEO Bobby Kotick has blamed "a very aggressive labor movement working hard to try and destabilize the company" for its woes even though the biggest scandals have stemmed not from any union but from state and federal government agencies suing it for gender discrimination, horrifying press reports, former employees, and Kotick's own ex-girlfriend filing a restraining order against him.
If all this is just an elaborate frame-up job by the union, it's a damn good one. That's a Machiavellian masterpiece, an incredible bit of puppet mastery to besmirch the impeccable reputation of an upstanding corporate citizen. Much respect.
But it also seems like a really, really inefficient way to organize?
STAT | 39 – The number of unionized QA testers who will be covered by the collective bargaining negotiations Activision Blizzard is having with employees at Raven Software and Blizzard Albany, as detailed in Activision Blizzard's response to the Glass Lewis report.
And so far, the wins the union is getting probably aren't worth the trouble of conspiring with such a diverse coallition of dastardly public and private entities to defame a completely innocent game publisher. Activision Blizzard said it has reached a tentative agreement with the Raven crew on post-game crediting standards, and has two more such points of agreement with the Blizzard Albany QA staff on unspecified subjects.
The frame-up went off without a hitch and two years later this is all the union has to show for it?
The gains from the eventual union agreements will doubtlessly have a significant impact for the workers covered by them, but you would think any group capable of masterminding a scheme as nefariously far-reaching as this conspiracy to discredit Activision Blizzard would have had a bigger payoff in mind. As far as machinations go, this one is downright Rube Goldbergian.
Getting back to the proposal, Activision Blizzard is also telling shareholders to vote against the unionization non-interference policy because it would "fundamentally undermine the Company's free speech rights."
Again, that's the same Activision Blizzard that banned a Hearthstone player for expressing support for protestors in Hong Kong, that fired a World of Warcraft designer for joking about corporate greed in dialog for the game's treasure goblin character, and is accused of firing two QA employees for speaking up against the return-to-office plan. Clearly the company is a big believer in free speech.
QUOTE | "It is very important for the Company to be able to exercise its free speech right to express a view on whether unionization is a good choice, especially as this is a matter that will legally bind the Company." [Emphasis in original.] - Activision Blizzard busted out the italics so you would know how serious this is.
The phrasing there is key, because it depends on what the definition of "this" is. When the company says, "This is a matter that will legally bind the company" in its explanation for why shareholders should vote against the proposal, one might reasonably assume "this" refers to the proposal.
QUOTE | "While our Board believes that the views of the Company's shareholders are of the utmost importance and will carefully consider the outcome of the vote expressed by our shareholders when making future disclosure decisions, the vote will not be binding upon them." – In informing shareholders of the proposals up for a vote, Activision Blizzard was very clear that Proposal 6 would be non-binding.
Perhaps we're splitting hairs here, and the company would not be legally bound by the shareholder vote, but would be legally bound by a union non-interference policy adopted as a result of the vote. Which is sort of understandable, right? Even if a proposal is non-binding, it's not like management is going to tell the literal owners of the company to kick rocks.
QUOTE | 67% - The percentage of shareholder votes in favor of a non-binding 2022 proposal for the company to share metrics related to abuse, harassment, and discrimination at the company.
QUOTE | "Kick rocks." – Activision Blizzard's response to those shareholders. Oh no, wait, that's my paraphrasing, not a direct quote. Let's see if we can dig up the real thing…
QUOTE | "We believe that we have included the metrics that best enable our shareholders to evaluate our workplace progress, and which go above and beyond the proposal's request." – An Activision Blizzard representative explains why the Transparency Report the company released a couple weeks ago did not actually include the information requested by the non-binding shareholder proposal that prompted it.
In case you're curious, the metric the proposal requested was the total number and aggregate dollar amount of settlements related to sexual abuse, harassment or discrimination based on race, religion, sex, national origin, age, disability, genetic information, service member status, gender identify, or sexual orientation for the prior three years.
How much is that? Well we can start with the aforementioned $18 million EEOC settlement and the seemingly more than 200 paid off by that – the actual number was not disclosed in Activision Blizzard's transparency report so we had to infer that from the details it did give – and assume the numbers go up from there.
In fairness, Activision Blizzard's disclosures were enough for some people. The New York State Common Retirement Fund had been the one to file the initial proposal last year, and it filed basically the same proposal again this year as the transparency report had not been released to that point.
When asked for comment, the NYSCRF told us it was satisfied with the report and had withdrawn this year's proposal as a result.
- Activision Blizzard believes collective bargaining is a human right, and it is trying its hardest to make sure its employees never actually use that right.
- The people who want to exercise that human right are evil manipulators who convinced government agencies, legacy press outlets, current and former employees, and Kotick's ex-girlfriend to spread damaging lies about the company for years, and the rewards they have reaped for that herculean effort are (tentative) game credits standards for a handful of QA employees.
- Activision Blizzard is negotiating with those evil manipulators in absolutely good faith, so there's no need for shareholders to vote for a non-binding proposal because the company will be legally bound by the thing it can just decide not to do anyway, just like it decided not to do the last thing shareholders suggested.
The big question here is whether or not shareholders actually care about any of this. We won't be waiting long for an answer, as the annual general meeting and shareholder vote is set for Wednesday.
Update: After publication, an Activision Blizzard representative reached out to comment regarding the transparency report, saying, "We are proud of this report and the work that we've done to create an inclusive and welcoming workplace. This work is critical and ongoing, it is never considered done. We will continue working towards the commitment we made to current and future employees to be the most inclusive company in our industry."
The rest of the week in review
Before we get to the quotes and stats, the big thing this week was the back half of the Not E3 summer showcase week.
You can read our recaps of the Microsoft and Ubisoft showcases, while the podcast-inclined can listen to James Batchelor and Marie Dealessandri talk about Xbox's lineup while James and I discuss Ubisoft's in shorter-than-usual "Microcast" episodes.
We've also got a staff round-up of indie games shown outside of the AAA showcases that we think deserve a closer look.
QUOTE | "Our business right now, from a revenue standpoint, is about twice the size it was during the Xbox 360 generation." – Xbox head Phil Spencer says the Xbox business is much bigger now than in what he often hears people talk about as the heyday of the brand. (Also, Microsoft is expecting to top $1 billion in PC game revenues for the first time ever this year.)
QUOTE | "For inXile, for Compulsion, for Obsidian… these are the first games that they've showed that are sort-of beginning, middle and end under the Xbox banner. These are games that they started post-acquisition as part of us, and it's just great to see those." – After the Xbox summer showcase, Xbox studios head Matt Booty suggests the company has turned a corner on first-party output.
QUOTE | "The industry has been heading in this direction for years, with AAA games taking longer to build and living for longer as live service products. The days of major publishers rocking up in LA with half a dozen new games to show are over." – Our own Chris Dring reflects on his week in Los Angeles covering the summer games showcases not quite filling the gap left by E3.
QUOTE | "Of course, as I'm sure you're aware E3 used to be the place where you made all of your big announcements but as we're seeing more and more, particularly with the advantages we have with the internet, we're able to make announcements really at any time." – In an interview with us 10 Years Ago This Month, Nintendo's Shigeru Miyamoto unintentionally articulates the reason we would not have an E3 a decade down the line.
QUOTE | "I was personally surprised that Premium has ended up being a bigger share of the base than Extra. We all thought that Extra would be where the majority of people went to first, but actually Premium has been more popular and bigger." – Speaking with us about PlayStation Plus, Sony VP and global head of subscriptions Nick Maguire says people have been willing to pay the extra $20 annually for the top tier plan with retro games and streaming.
QUOTE | "I want to reinforce this being a place for developers to support each other, where maybe they could come and talk about how they feel a contract they got from a publisher wasn't what they expected, especially with recent online discussions about how contracts should be more transparent; and you need to feel comfortable to talk about that stuff." – Tokyo Indies organizer Alvin Phu talks about how the event has fostered the Japanese indie scene since 2014.
QUOTE | "I want to be clear that the decisions about this program were not taken lightly." – Embracer Group CEO Lars Wingefors details the company's restructuring program in an open letter warning that layoffs and studio closures are coming, cuts that maybe could have been avoided if the company had not taken lightly a number of decisions around its rapid acquisition and expansion during the pandemic, which saw it grow from 26 internal studios worldwide to 138.
QUOTE | "Finally, an American institution everyone can hate." – In a press release announcing Dan Houser's new media company Absurd Ventures, this was the entirety of the text in the "About Absurd Ventures" section.
QUOTE | "[Remedy creative director] Sam [Lake] really, really, really, really wanted to make it." – Alan Wake 2 game director explains why the horror sequel is finally being made. (Yes, there were other reasons too.)
STAT | 200 to 250 articles – The expected weekly output listed in a (now closed) Gamurs Group job posting for an AI editor, bringing new meaning to the company's commitment to creating "timeless content" for its readers.
The role's responsibilities also included things that are essentially impossible with that kind of output, like fact checking and rewriting, and literally impossible with the use of generative AI, like avoiding plagiarism.
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