Déjà Vu All Over Again

Activision Blizzard, the video game maker behind Call of Duty, World of Warcraft, and Overwatch, is being sued by the state of California for its culture of sexual harassment. This is just the latest such news in a two-plus-year period of Me-Too moments in the interactive gaming industry. Consumer, sponsor, and employee backlash to this incident, on top of frustration over many others that have preceded it, bears watching as it could potentially have an impact on the industry’s lucrative licensed products business.

Some of the organizations that have been the focal point of allegations in the last couple of years include:

  • Activision Blizzard. The above-mentioned lawsuit, filed July 20 of this year, was the culmination of a two-year investigation that found what the suit called “a pervasive frat-boy culture.” Allegations include women being routinely sexually harassed, targeted when they report an incident, paid less than men for the same jobs, and passed over for promotion due to their gender. Some executives have resigned since the filing, which the company has called “distorted” and “irresponsible.” According to press coverage, the ramifications of the lawsuit, and Activision Blizzard’s response to it, have included a $10 billion hit to the company’s stock value; a day-long walkout by 1,500 employees, along with pro players and amateur gamers refusing to play; a publicly released letter to management signed by more than 30% of the company’s 9,500 employees; and the loss of Kellogg’s, State Farm, and T-Mobile as sponsors. Another lawsuit has been filed against Activision Blizzard by its investors, alleging the company did not disclose the details about its workplace culture.
  • Ubisoft. The French gaming company, whose properties include Assassin’s Creed, faced numerous allegations about a toxic workplace last summer, leading some executives to resign. After the Activision lawsuit this summer, nearly 500 of Ubisoft’s current and former employees from 32 of its studios in Europe, North America, and Asia, signed a letter criticizing the lack of action since the company was in the news last year. And just this week, the Singapore government announced that is looking into allegations of discrimination and sexual harassment at Ubisoft’s office in that country.
  • Riot Games. In spring 2021, news came out that Riot’s CEO was being investigated for sexual harassment, following a lawsuit against him. Riot, which is owned by Chinese technology, entertainment, and media conglomerate Tencent and publishes League of Legends, has been at the center of past incidents as well. It had agreed, in 2019, to pay $10 million to 1,000 female employees to settle a class-action gender discrimination and unequal pay lawsuit, after accusations of sexist behavior in 2018. The 2018 allegations led to an apology by the marketer, which also said at the time that it would issue a revised statement of values and implement new management practices. This week, California said Riot has not informed its employees of their right to speak to the state about any harassment and discrimination they have experienced, which it had required the company to do in June.
  • Evolution Championship Series. In 2020, Bandai Namco and Capcom pulled out from the Evolution, or EVO, Championship Series following a sexual misconduct scandal surrounding its CEO, who resigned. The event, which is a live competition exclusively focused on fighting games, was cancelled that year, but returned in 2021 (virtually). Sony Interactive Entertainment and its PlayStation brand purchased EVO in March of this year.

These and other similar incidents, as well as occasional detailed social media threads in which women have recounted many episodes involving agents, executives, streamers, e-sports pros, and others across the industry, have occurred for many years, often prompting harassment and sometimes even death threats toward the accusers (see: Gamergate in 2014). Each time these stories hit the news, women who work in gaming—they account for about 25% of industry employees and 16% of management, according to consultant 20-first—hope the publicity marks a turning point. But, unlike in many other industries where the Me-Too movement has taken hold, the situation more or less ends up going back to where it was, until the next uproar.

Will the Activision Blizzard situation, with its aftermath of sponsors dropping out and stock prices plummeting, be a force for change? Licensees whose businesses depend on the gaming industry and particularly on Activision Blizzard, which collected revenues of more than $8 billion in fiscal 2020, are among those waiting to see what happens.

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