Xbox chief says he's evaluating relationship with Activision Blizzard after new scandal

NEW YORK (BLOOMBERG) – Microsoft’s head of Xbox said he is “evaluating all aspects of our relationship with Activision Blizzard and making ongoing proactive adjustments”, in light of the recent revelations at the video game publisher.

In an e-mail to staff seen by Bloomberg News, Mr Phil Spencer said he and the gaming leadership team are “disturbed and deeply troubled by the horrific events and actions” at Activision Blizzard.

He referred to the Wall Street Journal story earlier this week that said chief executive officer Bobby Kotick knew of sexual harassment at the company for years and that he mistreated women. “This type of behaviour has no place in our industry,” Mr Spencer wrote.

He joins a swell of outcry from employees to investors and shareholders in demanding a stronger response from the United State’s second-biggest gaming publisher.

On Wednesday (Nov 17), Sony Group’s PlayStation chief Jim Ryan sent a similar note to staff, writing that he and his leadership were “disheartened and frankly stunned to read” that Activision “has not done enough to address a deep-seated culture of discrimination and harassment”.

But Mr Spencer went a step further in saying he would take action. Xbox and PlayStation are among the video game industry’s biggest console manufacturers.

Activision has a long history with the Xbox. The publisher’s largest franchise, Call Of Duty, became successful largely due to Microsoft’s innovative online platform Xbox Live, which allows players to connect for multiplayer matches. Most of Activision’s games are published on Xbox consoles.

At least 500 Activision employees have signed a petition to remove Mr Kotick, and a shareholder group has called for him to resign and for two other long-serving directors to step down by the end of the year.

“We respect all feedback from our valued partners and are engaging with them further,” Activision said in a statement. “We have detailed important changes we have implemented in recent weeks, and we will continue to do so. We are committed to the work of ensuring our culture and workplace are safe, diverse, and inclusive. We know it will take time, but we will not stop until we have the best workplace for our team.”

As public backlash mounts, the company’s stock has taken a hit. JPMorgan Chase cut its recommendation on the stock, citing the growing controversy over Mr Kotick. The “recent negative headlines introduce a significant amount of uncertainty into this story,” and it is unclear how long this issue will remain a risk, JPMorgan analyst Alexia Quadrani wrote in a note to investors.

Activision stock slid 3 per cent on Thursday, bringing losses this week to more than 10 per cent.

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