Activision Blizzard reports $639M profit for Q3 despite a sexual harassment scandal. Share prices down after the announcment that Diablo IV and Overwatch 2 launch will be delayed.
Activision Blizzard (ATVI) reported a $639 million profit for Q3 2021 last Tuesday, beating expectations. The financial results posted show that despite the sexual harassment scandal, Activision Blizzard’s profit was not hurt, and what’s more, increased 5.8% compared to Q3 2020.
Contrasting these positive results is the news that Overwatch 2 and Diablo IV launches will not happen any time soon. Moreover, the adjusted sales forecast for the holiday quarter impacted heavily on Activision Blizzard shares which lost 10% despite the $639M profit for Q3.
Activision Blizzard’s Investors file class-action lawsuit against company
Trouble in Activision Blizzard continues. After California’s lawsuit, the stepping down of its president J. Allen, and workers rejecting the law firm chosen to audit, this Tuesday, the investors of Activision Blizzard filed a class-action lawsuit.
Activision Blizzard’s profit breakdown
The game holding company Activision Blizzard’s profits come from three business segments:
- Activision Publishing (console games): The business generated over 30% of Activision Blizzard’s revenue at $641M. Compared to Q3 2020, revenue went down 17.1%, but this can be explained by the great impact Tony Hawk’s Pro Skater game launch had one year ago. Call of Duty Mobile showed a 40% growth year-to-year.
- Blizzard Entertainment (PC Games): Driven by Diablo II: Resurrected, this Activision Blizzard segment reported profits of $493M. The figure surpasses over 20% year-over-year from Q3 2020 reports.
- King (mobile games): The mobile segment also experienced a 21.6% increase compared to Q3 2020. Activision Blizzard made a $652M profit from this segment in Q3 2021.
The announcement of the delay in Diablo IV and Overwatch 2 caused a big impact on the company shares. Despite the jump to $80 per share on Tuesday after Activision Blizzard’s profits for Q3 became public, after the news of the delays, the share price dropped below $70 per share on Wednesday.
Sexual harassment scandal
After a two-year-long investigation, the California Department of Fair Employment and Housing filed a lawsuit against Activision Blizzard in August. The lawsuit was in response to sexual harassment and discrimination complaints. This scandal had a huge impact on the company, including a change of leadership and an enormous hit in its stock price.
Activision Blizzard is seeking an $18 million settlement, according to Yahoo Finance, and has taken many measures to solve the problem from the root. Earlier this week, Activision Blizzard CEO Bobby Kotick announced that they are “working to increase the percentage of women and non-binary people in its workforce by 50% in the next five years”
On top of that, in a letter regarding progress and commitments, Bobby Kotick talked about specific measures in response to employees’ demands. As proof of his commitment, Kotick asked for a payment reduction to $62.500. During 2020, he earned $155M in total compensation, making him one of the highest-paid CEOs in the USA.
Activision Blizzard CEO, Bobby Kotick, Takes Pay Cut Amidst Legal Battles
The letter announces five new changes coming to the company including zero-tolerance towards harassment, increase in women and non-binary employees, waiving arbitration and pay equity.
Activision Blizzard’s future is still unclear despite its profit report. However, the change in leadership and the concrete measures taken seem to be steps taken in the right direction. Stay tuned to Esports.gg for more gaming news and updates.