Let’s start with a disclaimer in that the all the allegations of abuse at Activision Blizzard are abhorrent. At no point am I defending any of those actions, and I’m not too far away from the idea that it’s simply too corrupt to continue. It’s a farce to believe that capitalism exists – it’s an oligarchy driven by a sole purpose, more power through more money. Power corrupts, plain and simple.
In my prior post I was somewhat curious as to what the fallout would be of the DFEH lawsuit. Considering what came before it, the odds of any significant impacts were rather low. A few shuffles, but generally not much else.
We’re at 2 weeks now, and J Allen Brack is gone (no surprise, he was named in the suit) as well as a formal release of the head of HR (who was out of that position in January, indicating knowledge this was all coming). That’s expected. The replacements with Kotick-assigned members is also expected, given that has been the trend for nearly 10 years now.
There are other bits in this too, all standard things that are part of the corporate dance. There’s an internal bad cop, the staff express dismay and write a letter, the good cop steps in with some sort of plan to address it (but not). Shareholders complain that the value of the stock is tarnished. There’s a lot of hand waving is what I’m getting at.
Kotick is a smart bugger, you have to give him that. Employees wanted a big response… they got one from one of the largest law firms on the globe. A firm that will report to Kotick, and zero reason to anything other than the bare minimum.
Tangent for a second. Amazon treats most of their employees as garbage and disposable (enabled by our massive consumer tendencies). They account for turnover rates near 150% per year. Amazon employs so many people and turnover is so high that they have a corporate risk that there are not enough people to replace those leaving and that they will have burned out that pool. In other words, they are at a point where it’s possible there are not enough people who want to work for Amazon in order to keep the thing moving. This is a new concept, where most companies figure that cheap labour is practically infinite (and to Amazon’s credit, they somehow found the value of that term.)
Kotick has only one concern here… making shareholders happy. Doesn’t matter who is stepped on to get there, there’s always another job applicant waiting to fill in the ranks. The stocks dropped by about 10% when the news broke on July 26 (the volume commensurate to shorts) and then bounced to halfway to continue the year-trend of a downward slope. The anticipation of the Q2 report had another dip (5%) which has pretty much bounced back after they reported that they met their financial targets (well, Activision did. Blizzard is still hemorrhaging players and their pipeline is even dryer than before.) And if you think he’s not going to do everything in his power to crush any possibility of a union, then you’re not paying attention.
Is it a good thing that Activision is trying to build a corporate culture on top of a “bro” culture? Honestly, yes. Corporate cultures evaluate risk to make decisions. Blizzard assumed (from the allegations) that a reminder was enough to stop the bad behaviour. If anything this raises the floor of bad behaviour to the industry average, rather than the bottom. Industry is still very bad, so it’s more about the lesser of two evils. There’s no “return path” for Blizzard here.
All back to the topic of actual meaningful change. I don’t see that actually happening in this case, not unless there is a massive financial incentive to do so. I’d love for that to not be the case, but we’re talking about companies that rake in billions of net revenue dollars per quarter (close to $10b a year). It’s like if you had $10 dollars and I said you need to pay me 10c a year and do what you want to your employees.
If ever there was a time for me to be completely wrong, I wish it was here.
I think there are some key numbers. Activision employs about 9,500 people worldwide. Of that 4,700 are attributable to Blizzard, and of that 300 work on World of Warcraft. When you think in terms of let’s say 10 bad apples in the whole company, that’s 1/10th of 1%, but if it’s 10 out of the 300, now it’s a noticeable figure over 3%. Kotick probably rarely hears about things going on day to day, he is answerable to the board, and investors. As long as they are getting a good return on their investment they don’t care how he runs the business. Those under him, Presidents, CEO’s CFO’s heads of divisions may have him ask what’s going on, how are our numbers looking. If they tell him things are doing good, we expect to exceed revenue expectations, he’s done with the conversation. He doesn’t care if Bob who has been with the company 10 years has made inappropriate remarks or let his hands wander with others, that’s HR’s job.
I was trying to think of a good analogy. If the company that makes engines for Ford motors had a lawsuit against the division that makes fuel injectors. Would you hold the President of Ford responsible.
Kotick is the big money man, he is looking for ways to make even more money. Where we would be thrilled to find out we had an extra $500 in our account one month, he’s looking at deals to make billions. For him, the easiest course is to pull in a group that represents the corporation, not the employees, have them investigate all claims, get their report, and fire whoever is doing anything that impacts the bottom line. To investors that’s what they want, remove anyone that is cutting into profits. It doesn’t matter if someone is great at their job, has 2 kids with special needs at home and desperately needs the job, if they got drunk at Blizzcon 6 years ago, and said some inappropriate things, they may find themselves out of work.
For me? I’ve worked the same job for over 35 years drawing Concrete panels on multi million dollar buildings, stadiums, parking garages, bridges. Businesses have made a crap ton of money from me doing my job. But once, about 10 years ago, I made a minor error, and it costs about $2000 to fix. No one remembers the 10’s of thousands I’ve saved because of things I found, but they never let me live down my one mistake. Fortunately for me I have 8 1/2 years to go until I can retire, and it can’t get here soon enough. I’ve seen the way my industry has changed over the last 35 years. I don’t want to be around longer than I have to the way things are getting.