August 03, 2021
Happy Tuesday, everyone. Megan Farokhmanesh and Stephen Totilo here with more gaming news.
Today's edition is 1,298 words, a 5-minute read.
1 big thing: Activision Blizzard's broken system
Activision Blizzard's HR department undermined and discounted victims' experiences, and did not protect their identities, according to a dozen current and former employees speaking with Axios.
Why it matters: Following a lawsuit filed by California against Activision Blizzard, allegations of harassment, misconduct, and assault continue to emerge from people who point to the company's HR department as being part of the larger problem.
- Sources Axios spoke to said that harassment and misconduct were well-known and well-documented despite the company saying the allegations are "incorrect, old, and out of context."
- People have been cautioned against filing a report or attempting to take action against harassers or bad actors, one current employee says. "They say things like, 'This isn't a fight you want to fight.'"
Details: Employees who have gone to HR with complaints say the department had a reputation for doing nothing.
- A former employee, whose harassment came directly from their boss, tells Axios they felt they had no tools to resolve their problem. "Even if [Blizzard wants] to take it seriously, I'm not even sure what we would do," the source said.
- Even filing a report was "a double-edged sword," one former employee tells Axios, because "they were going to tell everybody about what you said. Nothing you said was private with HR."
Another current employee with the company for over five years tells Axios that after she was physically assaulted by one employee, her report to HR was met with instant skepticism.
- "One of the things [the HR rep] commented on was that she was surprised I wasn't crying or I wasn't more hysterical."
In a comment to Axios, an Activision Blizzard spokesperson said the company takes "every allegation seriously and will investigate all claims."
- "We will not tolerate anyone found to have impeded the integrity of our processes for evaluating claims and imposing appropriate consequences. If employees have any concerns about how Human Resources handled claims, we have other reporting options, including anonymous ones."
The bottom line: The company's problems with HR are but one part of the larger systemic issues that helped foster a toxic culture that enabled harassment.
2. Blizzard's president steps down
Blizzard president J. Allen Brack is being replaced by Jen Oneal and Mike Ybarra, just weeks after an explosive lawsuit filed by the state of California involving misconduct at the company.
Why it matters: Brack's step back amid the ongoing scandal is the most concrete reaction Activision Blizzard management has taken since the lawsuit broke.
- Internally, sources tell Axios that the news came as a shock this morning. One employee says that there's excitement about the new role for Oneal, who used to run Activision's Vicarious Visions studio, but "there's a sense that Bobby [Kotick] is hoping to just make [Brack] the fall guy without needing to make any other changes."
- Chief compliance officer Fran Townsend — whom thousands of employees have petitioned to step down from the company's women's employee network — remains in her current role, a spokesperson told Axios.
What they're saying: On Twitter, organizers behind the recent employee walkout — now calling themselves "The ABK Workers Alliance, an organized group of current Activision Blizzard, Inc. employees" — said they "look forward to working with the new leadership to address our ongoing concerns."
- "No one person is responsible for the culture of Blizzard; the problems at [Activision Blizzard] go beyond Blizzard and require systemic change. We stand by our demands, and we remain committed to taking action until they are met."
- Employees are fighting for four major changes at the company, including an end to mandatory arbitration clauses and better hiring practices.
3. Tencent stock drops over media report
Shares of gaming giant Tencent tumbled 10% yesterday — a $60 billion loss — after Chinese state media referred to games like its popular "Honor of Kings" as "spiritual opium" that is hooking kids.
- "No industry, no sport, can be allowed to develop in a way that will destroy a generation," the article stated, according to Reuters.
Why it matters: Tencent is one of the most powerful companies in gaming, but the stock slide showed how vulnerable it is to threats of local regulations.
Between the lines: The article appeared in Economic Information Daily, which is affiliated with China's state-run news agency Xinhua, Reuters reports.
- It was then deleted and restored later in the day with a version that omitted the "spiritual opium" phrase and struck a more positive tone.
- The Chinese government has tried to strike a balance between regulating youth gaming while supporting the country's gaming industry, Niko Partners analyst Daniel Ahmad said on Twitter.
- Tencent said on Tuesday it will block children under 12 from spending money in "Honor of Kings" and will shorten the allowed play time for children, Reuters also reported.
The big picture: Tencent's fate is tied to dozens of other gaming companies well beyond China.
- It owns "League of Legends" studio Riot Games, "Clash of Clans" makers Supercell, 40% of "Fortnite" maker Epic Games and has investments in dozens more game companies.
4. A new round in EA's executive pay fight
An investor group that has for over a year been critical of how Electronic Arts' top people are paid says it is only partially satisfied by the company's latest pledges.
Why it matters: EA shareholders issued a rare "no" vote on the company's executive pay last summer, and EA has laid out measures to address that.
- The pay vote is non-binding, but a flurry of filings last month showed that EA wants to avoid another loss this month.
- Investment group SOC (former CtW) is urging shareholders to vote "no" on this year's payment plan.
Between the lines: At issue is whether EA's bonus payments are too frequent, too large and too quickly given as a means of retention, a justification given for CEO Andrew Wilson's unusually large $30 million stock award for the current year.
- In late June, EA said it was forgoing special stock awards to its top executives through 2022 and, under pressure, extended that to 2026 last week.
- SOC says that "unprecedented" helps, but is two years too short for it to support the payment plan.
- It also criticizes EA's continued justification for special bonuses as a means to keep executives, stating in a letter today that "it is time to encourage a climate where executives are content with ordinary course equity award levels most of the time[.]"
What's next: The EA pay votes are due on Aug. 12.
5. Need to know
- Take Two Interactive is delaying two "immersive core" titles until later in its fiscal year ending March 31, 2022, the company said yesterday. It also plans to announce a new franchise later this month that will be out by that same date. No official details about what any of these games are.
- Getting added to Xbox Game Pass soon: "Hades," "Art of Rally," "Katamari Damacy Reroll." Leaving Game Pass soon: "Grand Theft Auto V," "Final Fantasy VII."
6. Worthy of your attention
"GTA Online's" new update has fans walking in circles for days (Zack Zwiezen, Kotaku)
Players were soon thinking about ways to get their in-game character walking without direct human input, perhaps allowing you to move around while sleeping or working. Theoretically, you could grind some of that pesky Tuner XP for days at a time. This is the practice of AFKing and it's not a new thing in "GTA Online." Many players, myself included, have been doing it for years across various games. But the Tuners update has lobbies filled with AFKing so players can unlock some of the higher-level car parts.
7. Hyrule mapped
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AFKing right now.