New York City sues Activision Blizzard over Microsoft deal

By Cristina Alexander Published May 4, 2022

Activision Blizzard is now in even more legal trouble than before. New York City has sued the Call of Duty and World of Warcraft publisher over the acquisition deal it made with Microsoft in January.

According to Axios, which broke the news, the lawsuit was filed in Delaware by the New York City Employees’ Retirement System (a pension fund for the city’s firefighters, police officers and teachers) on April 26, and the public version of the complaint was shared on May 2.

The group alleges in the complaint that CEO Bobby Kotick only rushed the $70 billion sale of Activision Blizzard to Microsoft in order for him and the board of directors “to escape liability and accountability entirely” for the sexual misconduct and gender discrimination that took place at the company, which caused its stocks to plummet. When Microsoft agreed to buy the company for $95 per share, they say it devalued the stock even further. The discrimination allegations are the subject of an ongoing lawsuit filed by California’s Department of Fair Employment and Housing in July 2021.

“Given Kotick’s personal responsibility and liability for Activision’s broken workplace, it should’ve been clear to the board that he was unfit to negotiate a sale of the company,” the complaint reads. “Not only did the merger offer Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty, but it also offered Kotick the chance to realize substantial non-ratable benefits.”

New York demanded Activision Blizzard send a list of documents and other materials related to the sale, including information on five potential buyers and board memos. The city said has also been pressing the company for internal documents since last fall to find out the extent of Kotick’s knowledge about Activision Blizzard’s “frat boy culture” of sexual harassment and abuse during his tenure, which The Wall Street Journal reported about in November.

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Cristina Alexander

Gaming/Mobile Writer

Cristina Alexander has been writing since 2014, from opining about pop culture on her personal blog in college to reporting…

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This news comes just after Nintendo got sued in North America over its implementation of loot box microtransactions in Mario Kart Tour. However, this decision comes from the European game ratings board PEGI after a reassessment of Diablo Immortal's rating. Activision Blizzard, along with Hunt: Showdown Bounty Hunter -- Limited Edition publisher Plaion, got fined over not properly disclosing the presence of microtransactions in their games when disclosing information to PEGI for a game rating. That's a shocking omission in Diablo Immortal's case, considering just how much it entices players to spend money on the game.
"Both games were published in 2022 and although they contain paid random items (like loot boxes or card packs), this was not disclosed to PEGI when the games were submitted for a rating license," a description of the case says. "Since this amounts to a violation of the rules described in the PEGI Code of Conduct, the PEGI Enforcement Committee sanctioned both companies with a fine of 5000€. The companies had also taken immediate action to update relevant store listings and marketing materials."
A fine of only 5,000 Euros is an extremely small drop in the bucket for a company like Activision Blizzard; Diablo Immortal alone was estimated to be making $1 million a day around its launch by Appmagic. Still, it's a noteworthy slap on the wrist and will hopefully encourage companies like Activision Blizzard to be more open and honest about the presence and relevance of microtransactions in their games.