Embattled Activision says it is facing increased attrition

Risks to Activision Blizzard’s game business include an uneasy workforce and an increasing dependency on a small number of franchises.

Driving the news: The company’s annual report, issued last Friday, drops the PR varnish and shows the problems the company is facing.

• Three franchises — Call of Duty, Candy Crush and Warcraft — accounted for 82% of the company’s revenue in 2021, up from 79% from the year before. No other series even brought in 10% of its revenue.
• The report stated that ongoing legal actions against the company and “related media attention can be expected to have an adverse effect on our ability to attract and retain employees and has resulted in work stoppages.”

The company reported having 9,800 full-time or part-time employees by the end of 2021, up from 9,500 the year before.

• But it noted “we have observed labor shortages, increasing competition for talent, and increasing attrition,” including “a significantly higher turnover rate of our human resources function in 2021.”

One startling acknowledgment: The company says California law required it to add another woman to its board of directors by the end of 2021, but it failed to do so.

• Activision had initiated a search but says the planned acquisition by Microsoft, with talks beginning in November, complicated matters.
• “Since the Company’s current directors would cease to continue to serve on our Board of Directors upon consummation of our proposed transaction with Microsoft, we were unable to conclude the process in 2021. We will be continuing our efforts to appoint a new female director.”
• The state’s law, which requires a board of Activision’s size to include three women, had created a “boardroom boom for women executives,” Axios reported last year.