Despite the impact of the game delays on the shares of the company, the better-than-expected earnings are helping to reverse the trend in the pre-market today.
The shares of American video game holding company Activision Blizzard Inc (NASDAQ: ATVI) plunged by 14.06% on Wednesday as the firm revealed two of its most anticipated titles, Diablo IV and Overwatch 2 will not be released until an unannounced date. As reported by Bloomberg, the delay of the two games is being attributed to the instability rocking the Santa Monica, California-based firm in relation to lawsuits on sexual misconduct and the exodus of executives.
More closely, the California Department of Fair Employment and Housing filed a lawsuit against the firm for unlawful employee remuneration practices, while the US Securities and Exchange Commission (SEC) is looking into the growing list of allegations levied against the company and its internal response to claims.
These ordeals have sparked a moment of reckoning from Activision Blizzard, which fights for balance with its competitors as gaming demands appear to be tapering down as the lockdown is lifted. In response to sexual misconduct, the company fired 20 employees last month with a total of 20 more placed on some form of disciplinary actions according to a Reuters report.
Despite the challenges rocking Activision Blizzard, the share plunge, which is the worst intraday the game publisher has had since 2008, has been attributed to the two games delay, which in turn is influenced by a spat of exits from the outfit. The company’s co-leader, Jen Oneal in an open letter said it will be leaving the firm to pursue a bigger ambition that includes women inclusion in the gaming industry.
“I’m inspired by the passion of everyone here, working towards meaningful, lasting change with their whole hearts. This energy has inspired me to step out and explore how I can do more to have games and diversity intersect, and hopefully make a broader industry impact that will benefit Blizzard (and other studios) as well. While I am not totally sure what form that will take, I am excited to embark on a new journey to find out,” she said.
The exit of other employees directly working on the games has spurred the company to postpone the release, with plans to give new hands the chance to adjust and complete the production. Besides the expected Diablo IV and Overwatch 2 titles, Activision Blizzard is also known for the Call of Duty, Candy Crush, and World of Warcraft games amongst others.
ATVI Shares Plunge Overturned by Impressive Earnings
Despite the impact of the game delays on the shares of the company which pushed the stock to new lows, the better-than-expected earnings are helping to reverse the trend in the pre-market today. The company’s third-quarter earnings were 72 cents a share, slightly beating analyst estimates of 70 cents. Revenue was as projected by Wall Street analysts and was pegged at $1.88 billion. The ATVI shares are trading with a gain of 1.27% in the pre-market to $67.60 at the time of writing.
In addition, Founder and CEO, Bobby Kotick agree to a 99.9% pay-cut in order to pacify aggrieved staff with an additional $18 million fund earmarked to compensate and make amends to eligible claimants.
next