With Activision’s deal, Microsoft gets another scandal to clean up

Two weeks ago, Microsoft said it was taking steps to deal with an ongoing sexual misconduct scandal surrounding the company and its co-founder, Bill Gates.

Days later, he agreed to buy a video game publisher beleaguered by its own crisis of sexual harassment and discrimination.

Buying Activision Blizzard for $68.7 billion (NZ$105 billion) will give Microsoft some of the biggest video games on consoles and smartphones and a beachhead in a possible next phase of computing , the metaverse.

But first, Microsoft will have to deal with allegations that Activision underpaid women and let sexism and harassment go unpunished. Failure to do so could make Microsoft a less hospitable environment for women and people from underrepresented groups and a less attractive place to work.

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“Activision has clearly mishandled sexual harassment allegations and appears to have cultivated a male-dominated culture and a record of protecting predators,” said Natasha Lamb, managing partner at Arjuna Capital who was instrumental in securing Microsoft’s deal last week to hire an outsider. law firm to investigate the culture and allegations that Gates acted inappropriately towards certain female employees.

Microsoft surprised the gaming industry by announcing that it would buy Activision Blizzard for $68.7 billion.

Mark Lennihan/AP

Microsoft surprised the gaming industry by announcing that it would buy Activision Blizzard for $68.7 billion.

“Microsoft is obviously not immune to these issues and will have a lot of cleanup to do.”

Microsoft shareholders, despite the company’s opposition, approved a non-binding resolution in November for a review of sexual harassment policies. The law firm will review concerns raised by employees in a lengthy thread from 2019 and the steps Microsoft has taken to address them. The Company will benchmark the Company’s handling of allegations of misconduct and its resolution with those of its peers.

Lamb plans to seek assurances from Microsoft that Activision will receive the same treatment once the deal is finalized.

“At least Microsoft is moving toward cleaning up its own house, and maybe they can bring that to Activision,” she said.

Activision has been in trouble since July, when a California state agency filed a sex bias lawsuit against the Santa Monica, Calif.-based company. The complaint detailed his “frat boy culture” and accused the leaders of failing to act.

US regulators then launched an investigation. Bobby Kotick, who led Activision for three decades, came under pressure to resign after a bombshell report in the Wall Street Journal last year personally linked him to reports of woman abuse and suggested he had knowledge for years of sexual misconduct, including rape, at the company, but did not report it to the board.

Kotick apologized and pledged to make changes.

Activision said it has ousted more than 20 employees as a result of its investigations.

Jae C. Hong/AP

Activision said it has ousted more than 20 employees as a result of its investigations.

Microsoft has distanced itself from the men at the center of every controversy. Gates had previously severed ties with management, and Kotick will lose his chief executive title once the deal closes in 2023 and will likely leave, a person familiar with the matter said.

As part of the acquisition talks, Microsoft assessed Activision’s plans to address harassment issues, said Phil Spencer, head of games at Microsoft.

“We are on our own path here,” he said in an interview. “How can we share our learning with other teams and help the industry continue this journey that we all need to take?”

Still, the deal is likely to be discouraging for some women at Microsoft, Activision and across the tech industry, said Elizabeth Tippett, an associate professor at the University of Oregon School of Law who has studied technology and harassment training.

Games like Activision's Call of Duty largely revolve around strong male heroes and scantily clad women.

Wikimedia Commons

Games like Activision’s Call of Duty largely revolve around strong male heroes and scantily clad women.

In a way, Microsoft took advantage of the Activision scandal, which weighed heavily on the stock price and made an acquisition more affordable, she said.

“What message does this send to women working at Microsoft: We don’t care about buying a tainted company – we’re going to buy it because it’s on sale?” Tippett said

Male dominance permeates both companies’ products, said Jenna Drenten, who studies digital culture and consumer behavior as an associate professor of marketing at Loyola University Chicago.

Microsoft’s Halo, Elder Scrolls and Fallout and Activision’s Call of Duty, Overwatch and World of Warcraft series largely revolve around strong male heroes and scantily clad women, she said.

“Both of these gamesets have a deep-rooted history of gender-based harassment and sexualization in real-life gaming,” Drenten said.

The result is that women and people of color increasingly gravitate towards smaller studios that reflect their values, said Mia Consalvo, professor and Canada Research Chair in Game Studies and Design at the Concordia University in Montreal.

Activision said it has ousted more than 20 employees as a result of its investigations, but much more will need to be done to convince people from underrepresented groups that it’s a safe place to work, Consalvo said.

“Nothing really changes,” she said. “A few people come and go, but the culture remains the same.”

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