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Activision Blizzard settles for less | This Week in Business

Publisher pledges to set up $18 million fund for people it never wronged as government regulator avoids the "distraction" of a lawsuit

Another week, another bit of news about a government agency looking at Activision Blizzard for some sketchy business.

This time it was the US Equal Employment Opportunity Commission with a lawsuit that was settled almost as soon as it was filed. It had already been reported that the EEOC had been investigating Activision Blizzard and was in settlement talks, so it didn't come as a total shock. That said, the actual text of the complaint reads a bit differently than a generalized line in a news story about a company being accused of discrimination.

QUOTE | "Employees were subjected [to] sexual harassment that was severe or pervasive to alter the conditions of employment. The conduct was unwelcome and adversely affected the employees. The Defendants knew or should have known of the sexual harassment of the adversely affected employees." - Paragraph 22 of the US Equal Employment Opportunity Commission lawsuit against Activision Blizzard, filed on Monday three years after it began an investigation into the publisher.

QUOTE | "Some employees complained about the sexual harassment, but Defendants failed to take corrective and preventative measures. Once Defendants knew or should have known of the sexual harassment of the adversely affected employees, Defendants failed to take prompt and effective remedial action reasonably calculated to end the harassment." - Paragraph 23 of the EEOC suit.

QUOTE | "Defendants discriminated against employees due to their pregnancy that adversely affected the employees." - Paragraph 24 of the EEOC suit.

QUOTE | "Defendants retaliated against employees who engaged in activity protected by Title VII including, but not limited to, rejecting and/or complaining about sexual harassment and/or complaining about pregnancy discrimination. As a result of engaging in such protected activity, employees were subjected to adverse employment actions including discharge or constructive discharge." - Paragraph 25 of the EEOC suit.

Of course, we didn't even have time to read the suit before Activision Blizzard announced it was over and done with.

STAT | $18 million - The amount it cost Activision Blizzard to make the lawsuit go away, sending a clear message to American companies that allowing sexual harassment to go unchecked and firing people for speaking up about discrimination might at some point in the future be met with a slap on the wrist.

STAT | $155 million - The compensation package for Activision Blizzard CEO Bobby Kotick approved earlier this year.

QUOTE | "Nothing in this Decree is, nor should be construed as, an admission of wrongdoing or liability by Defendants either in this proceeding or in any other proceeding." - Text from the settlement agreement between Activision Blizzard and the EEOC emphasizes that the publisher didn't even need to admit guilt here. It just had to agree to set up an $18 million fund for the victims of the bad things it assures you it never did.

QUOTE | "However, the Parties recognize that through this Decree the Parties can avoid the expense, distraction and possible litigation associated with such a dispute and thus the Parties wish to resolve all issues through this Decree." - Another line from the settlement.

Now, I get why a lawsuit is an expensive distraction for Activision Blizzard and why it would want to avoid that. But this settlement says that was the opinion of all involved parties. And according to its own website, the EEOC is "responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee." So why is enforcing the law and punishing companies it has found to break the law suddenly considered a distraction? Isn't it the EEOC's stated reason for even existing?

QUOTE | "[The] recent settlement with the EEOC gives us comfort monetary damages will remain immaterial and worst-case scenarios are off the table." - An analyst with Jefferies thinks Activision Blizzard investors can breathe a sigh of relief, as reported by Axios.

QUOTE | "$18 million is a slap in the face to workers considering Activision Blizzard is worth $72 BILLION and workers dealt with toxic working conditions for years. The Securities and Exchange Commission, National Labor Relations Board, and California Department of Fair Employment and Housing must choose to truly hold Activision Blizzard accountable on behalf of the company's 10,000 workers." - The Communication Workers of America union's Campaign to Organize Digital Employees on Twitter, holding out hope that the other US regulatory bodies dealing with claims against Activision Blizzard will come down harder on the publisher. (Note: We edited that quote for readability.)

I don't know if unions are a perfect solution for the games industry, but if the institutions that are in theory relied upon to protect workers from discrimination and abusive workplaces -- HR departments, government regulators, basic human decency -- are demonstrably not up to the task, then surely it's time to explore alternatives.

The rest of the week in review

QUOTE | "A news report on Sept 30. 2021(JST) falsely claims that Nintendo is supplying tools to drive game development for a Nintendo Switch with 4K support. To ensure correct understanding among our investors and customers, we want to clarify that this report is not true." - Nintendo is apparently very tired of Bloomberg's reporting. In March, Bloomberg's sources said Nintendo was planning to unveil a 4K OLED Switch model this year, drumming up such anticipation that the announcement of the non-4K OLED model felt like a let-down to many. In July, Bloomberg reported the announced non-4K OLED model would have a larger profit margin for Nintendo than the standard Switch, which prompted Nintendo to issue a then-rare public denial.

QUOTE | "Atari had become synonymous with doing a lot of things, but not really providing a lot of clarity on why they were doing those things, what was their motivation, or where those reasons were coming from." - Recently appointed Atari CEO Wade Rosen goes through the time-honored tradition of Atari executives starting their tenure by acknowledging the brand has been mismanaged for years before laying out the plan to restore it to prominence.

The great thing about this tradition of throwing previous Atari management under the bus is that it's so often justified.

QUOTE | "Beyond re-launching its nostalgic gaming titles, the company will aim at capitalizing on other rapidly growing markets and reaching out to new audiences - including LGBT, social casinos, real-money gambling, and YouTube with exclusive video content." - In a June 2014 press release, Atari bizarrely conflates a list of endeavors it will bring the brand to while somehow not even hinting at the whole Speakerhats debacle or its expansion into hotels and blockchain, both of which it's still doing.

QUOTE | "The environmental concerns with blockchain are real. I'm tempted to just kind of back out of that entirely because I know how a lot of people feel." - In the same interview, Rosen responds to the suggestion that Atari's involvement in blockchain is tarnishing the reputation of the brand.

QUOTE | "From the exceptional PS5 remake of Demon's Souls to the critically acclaimed PS4 remake of Shadow of the Colossus and remasters of fan favorites like Uncharted: The Nathan Drake Collection, Bluepoint has built a name for itself by creating some of the highest-quality remasters and remakes in the industry." - PlayStation Studios head Hermen Hulst explains why Sony acquired its longtime development partner Bluepoint Games.

STAT | 6 - Our count of the number of Sony gaming acquisitions this year alone. Bluepoint joins Housemarque, Nixxes Software, Firesprite, Fabrik Games and fighting game tournament Evo as newcomers to the PlayStation corporate family.

QUOTE | "Accessibility doesn't hamper a vision, it actually enhances creativity. I want this game to succeed, I don't want them to fundamentally change how the game is played just to be able to add in accessibility that should have been thought of in the design process." - In a feature on the subject of accessibility, advocate Steve Saylor says instead of having Deathloop developer Arkane change the number of lives players have in concession to disabled people, he'd prefer the studio had made its initial design decisions with disabled people in mind.

QUOTE | "I got into game development because I love crafting fun experiences for other people. Having a strong sense of empathy is an instrumental skill for a designer and, because of that sense, I don't design for just one person or demographic. If everyone can't enjoy what we're making, we need to do better." - In announcing the formation of the Accessibility at Bungie group, designer Jonathan Barbeau explains his approach to making games accessible by design.

QUOTE | "It's important not to fall into the trap of thinking that, just because everyone else is doing something and seemingly getting away with it, it's fine for you to do it too. The fact is: you simply don't know why those products have not been taken down. Maybe they have a license. Maybe they will get taken down next week. Maybe they've ignored a letter of complaint and are about to get sued. The reality is that anytime you use somebody else's IP rights -- without getting permission -- there is some degree of risk that it could result in a complaint." - Harbottle & Lewis partner Kostya Lobov discusses the varying considerations companies take when protecting their IP from fan projects.

QUOTE | "In general the market is maturing in every possible way. Multiplayer didn't work well for VR, but now the install base is making this a lucrative segment. Only a year back there were no publishers for VR content, now this is changing. Free-to-play has not worked in VR due to limited install base, but I believe we'll see a couple of very successful F2P games in the next couple of years as the addressable market grows." - Fast Travel Games CEO Oskar Burman remains optimistic about VR.

QUOTE | "Unlike for other random NPCs in GTA 5, the game appears to purposefully play into extremely harmful stereotypes of trans and gender diverse people to encourage players to be repulsed by them and even to relish hurting and killing them." - Out Making Games has called on Rockstar Games to remove transphobia from the Xbox Series X|S and PlayStation 5 versions of Grand Theft Auto 5 launching next year.

QUOTE | "Our commitment to being an 'open Store for an open platform' isn't just about the various technical underpinnings of how apps are built. It's also about making sure our business terms are fair and help promote innovation." - Microsoft explains why it's allowing other store apps like Amazon and Epic Games Store onto the Windows Store without giving Microsoft a cut of revenues. I don't have much to say here, but I do enjoy the idea of a retail matryoshka doll using the Microsoft Store to download the Epic Games Store app to download the app and supporting indies from a store-within-a-store-within-a-store.

QUOTE | "One of the things we found when we were doing SkySaga -- but anybody will tell you this when you do a user-generated content platform -- some people blow your mind as to what they create. We know that people are going to do stuff [that's] going to really surprise us." - Philip Oliver skirts dangerously close to my favorite tech and gaming red flag, "We can't wait to see what people do with this." That line always makes me skeptical because it's so often used by companies who have something conceptually neat, but can't figure out what to do with it themselves.

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Brendan Sinclair avatar

Brendan Sinclair

Managing Editor

Brendan joined in 2012. Based in Toronto, Ontario, he was previously senior news editor at GameSpot in the US.