Updated Dec. 15, 2023 5:41 pm ET
Activision Blizzard has agreed to pay about $50 million to settle a high-profile lawsuit by a California regulator that helped spur Microsoft’s October takeover of the videogame company, according to people familiar with the matter.
California’s Civil Rights Department sued Activision in mid-2021, alleging its leadership ignored numerous employee complaints of sexual harassment, discrimination and pay disparity.
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Activision Blizzard, the video game company behind popular titles such as Call of Duty and World of Warcraft, has agreed to pay around $50 million to settle a lawsuit that sparked Microsoft’s takeover of the company.
The lawsuit was launched by the former CEO of Activision, Bobby Kotick, who accused the company of misusing its financial resources and causing its stock price to fall. The lawsuit sparked a bidding war, which resulted in Microsoft taking over the company for a reported $6.9 billion.
The settlement will end the lawsuit and avoid the costly and uncertain litigation process. Activation Blizzard and Kotick will pay $20 million and $30 million, respectively, from the deal.
The settlement comes at a beneficial time when the video game industry is struggling. Revenue for the industry’s big publishers has declined in recent quarters as people shift away from traditional console gaming toward streaming.
Activation Blizzard is making strategic moves to refocus its business into the gaming streaming and esports categories, which have been doing very well over the past few years. This settlement will likely help the company to focus on its strategic goals by removing the uncertainty of investing in a costly litigation process.
Additionally, the settlement will put to rest the potential for more lawsuits to arise connected to the takeover of Activation Blizzard by Microsoft. Furthermore, it should also pave the way for a smoother transition process and other future business opportunities.
Overall, it was in the company’s best interest to settle the lawsuit out of court for the sake of itself and the industry. Activation Blizzard was likely able to negotiate a favorable deal that will help to set the stage for the future of the company.
