On Tuesday, Activision Blizzard announced its financial results for the period, which includes the July filing of the California lawsuit on discrimination and sexual harassment and the immediate aftermath. The headline for investors is that the company’s revenue outlook for the end of the year is weaker than analysts expected, but it beat its third-quarter forecast with net revenue of $ 2.07 billion, which improved year-over-year with the help of Diablo 2: Resurrected .
Finance, however, felt like the secondary topic of the call as Activision Blizzard executives reiterated plans to review recruitment and HR practices and surprised employees with the news that Blizzard co-manager Jen Oneal is stepping down. The resignation came as a shock, and according to some, it has hurt the morale of Blizzard just as it began to improve.
Last week, Activision Blizzard finally responded to a list of demands issued in July by the employees who organized a walkout. The company partially conceded the requirement to remove mandatory arbitration from employment contracts and agreed to charge it with “individual claims of sexual harassment and discrimination.” Among a number of other things, Activision Blizzard has also promised increased pay transparency, recruitment policies that promote diversity, and a “zero-tolerance harassment policy” that will result in immediate dismissal and “forfeiture of future compensation.”
A source within Activision Blizzard told PC Gamer this week that they saw an overall positive response to last week’s announcement. The timing was seen as suspicious – the demands were recognized just in time to become focal points during Tuesday’s investor call – but the partial victory in arbitration was seen as a clear achievement, and the various recruitment policies reflect what individual Activision Blizzard teams have already been implementing without to wait for a company mandate. One thing that is still missing is third-party oversight of hiring and HR practices, including by a committee selected by employees, but the mood that led to the earnings call was certainly better than it was after a mistrust email from Director Fran Townsend earlier in October.
The news that Oneal is retiring as Blizzard co-owner just three months after taking over the role has, according to this employee, “killed” any moral boost from last week’s concessions. Oneal and Mike Ybarra replaced former Blizzard boss J Allen Brack, who left in August in the wake of the California lawsuit. With Oneal’s resignation, Ybarra is now Blizzard’s sole leader.
For some, Oneal’s leadership was one of the best reasons to believe in a better future for Blizzard. They are now wondering why Oneal would choose to go so fast, leading to speculation that something is not being said.
“I do this not because I have no hope for Blizzard, on the contrary – I am inspired by the passion of everyone here who works towards meaningful, lasting change of their whole hearts,” Oneal wrote in a letter to employees. “This energy has inspired me to step out and explore how I can do more to make games and diversity intersect, and hopefully make a broader industry impact that will also benefit Blizzard (and other studies).
Former Blizzard technical director Amy Dunham, who also announced her resignation this week, pointed out that Blizzard’s three most senior women all left this year.
“Before you commit to recruiting more women (usually at the entry level, where people have fewer choices to turn down opportunities), find out and correct why all your senior women choose to leave.” she wrote on Twitter.
The past three months have seen a number of other redundancies, as well as over 20 departures as a result of HR surveys and new, tightened policies. According to Tuesday’s earnings report, the bottom line has been undamaged so far: Call of Duty’s user base remains stable on PC and console, while Call of Duty Mobile has experienced “double-digit growth in the West” with a big jump in revenue. Blizzard’s revenue grew 20% year-over-year due to the release of Diablo 2: Resurrected, Hearthstone is enjoying steady popularity, and World of Warcraft is “on track” to have its best non-expansion year in a decade.
But while Call of Duty: Vanguard is coming out this month and the next major Warzone update will be released in December, it was revealed during the earnings call that the next two major games from Blizzard are going to take longer than expected: Overwatch 2 and Diablo 4 did not have public release dates, but we learned that their internal development timelines have been extended.
Activision Blizzard attributed in part the delays to the company executives’ departures. Diablo 4 game director Louis Barriga left the company for unspecified reasons after the allegations in July, even though a company statement to ensure “a safe, productive work environment” implied a connection. Overwatch executive producer Chacko Sonny left Blizzard in September for reasons unrelated to the lawsuit, and back in April, Overwatch CEO Jeff Kaplan also left the company.
Wear and tear is not a new issue for Activision Blizzard: A former employee recently told PC Gamer that they saw waves of employees leaving voluntarily along with the layoffs in 2019 and 2020. In addition to the delays in Overwatch 2 and Diablo 4, other long-term consequences of the company’s recent employee turnover still show up.
“Our growth potential has never been better, but we will not be able to realize all that growth potential without talent,” Activision Blizzard CEO Bobby Kotick said during Tuesday’s earnings call. “And in order to retain and attract the talent we need, we must, of course, be recognized as the very best place to work. That means we must be the most welcoming and inclusive environment.”
According to Kotick, the changes and initiatives announced so far are “just the beginning” of the company’s plans, and employees and shareholders will receive quarterly updates on progress.