Lawsuit Clouds Activision Blizzard’s Big Quarter

Activision Blizzard showed impressive revenue growth, while turmoil within the company led to the departure of Blizzard president J. Allen Brack on Tuesday.

Brack is stepping down as the company reels from a lawsuit brought by the California Department of Fair Employment and Housing. The suit alleges pay and opportunity discrimination against women and a culture that tolerated regular sexual harassment.

The gaming giant saw strong performances from its biggest titles — “World of Warcraft,” “Call of Duty,” and “Candy Crush” — as it beat expectations in the second quarter, which ended prior to the uproar.

• Revenue grew 18.8% year-over-year to $2.3 billion.
• Net income hit $876 million, a 51% leap from Q2 2020.

The company addressed the allegations in its earnings announcement, noting that it has hired a law firm to review company policies and procedures to ensure they “promote a respectful and inclusive workplace.”

Previously, the company and its legal counsel publicly challenged the merits of the lawsuit, prompting more than 2,000 current and former employees to sign a letter harshly criticizing the company’s response. Fifteen hundred employees staged a walkout last week.

The accusations are affecting other parts of the business, too. T-Mobile appears to have pulled out as a sponsor of the Overwatch and Call of Duty leagues, per Kotaku. Activision Blizzard acknowledged that a spate of negative press could affect future earnings.