Activision Blizzard CEO might step down amid sexual harassment scandal

Activision Blizzard CEO Bobby Kotick said that he may step down as his company faces a sexual harassment scandal. Yahoo Finance's Daniel Howley details the latest.

Video Transcript

JULIE HYMAN: Let's talk about another potential staffing change, if you will. And this at the top of Activision Blizzard. "The Wall Street Journal" reporting this morning that longtime CEO Bobby Kotick is considering stepping down from the video game maker if the sexual harassment and abuse allegations and culture at the firm is not quickly fixed. Our Dan Howley has been tracking this story that has been ongoing. It seems a little ironic that he says if they're not quickly fixed, because the reporting recently has been showing that this stuff's been going on for a while.

DANIEL HOWLEY: Yeah, it'll be interesting to see what kind of timeline, if any, is put on this by Kotick. This is something that he's, obviously, brought up himself, according to the reporting, and that he said to some of the other executives there. But the board already provided its full support for Kotick following the revelations in "The Wall Street Journal" report that basically said that Kotick had known about things, like the rape of an employee, the harassment, sexual harassment, pay issues. And he also apparently had threatened to have an assistant killed at one point over an issue that was going on at the company.

So clearly there seems to be this kind of disconnect between what Kotick wants and what employees want, because they are now protesting. They've done walkouts. Industry partners, the most important of all being Microsoft and Sony, have spoken out against Activision Blizzard, basically Microsoft saying that they're reevaluating their relationship with the company, Sony also having internal discussions about Activision Blizzard. And that would be incredibly dangerous for the company, because if they can't get access to Microsoft or Sony's consoles, then that's a huge swath of users who they would no longer have.

And so what this really means is Kotick has to make some kind of change quickly. And if he doesn't, then obviously he said he's going to step down. But we have some industry analysts really pointing out the fact that him being there could still be a long-term issue for the company, basically saying-- Jefferies analyst saying that while he's important than any individual developer, overall, developers are more important than the CEO, because they're the creative teams behind games that then get sold. And people are more interested in those creators than they are the CEO.

So if it means that they lose huge blocks of developers, then that's going to directly impact the company more so than a CEO leaving would. So I think that's something that a lot of people are keeping in mind. And I think that's going to be something that investors continue to look at going forward.

BRIAN SOZZI: And Dan, it's unclear, I would say-- I'm looking at the Activision Blizzard management page right now-- who would be Kotick's successor. I mean, he has consolidated power at this company. He's been at the top here for what, close to 30 years. And just looking at the leaders they have on their team, normal practices with large companies like this, you would have division heads as members of the executive committee. That is not the case here at Activision.

DANIEL HOWLEY: Yeah, it's hard to tell who exactly would come in and take over, maybe someone from outside. Especially with this kind of issue going on that seems to be systemic at the company, you would want to know whether or not they would start from a clean slate or not. But I think it really is difficult.

And it's also important to point out that Kotick has basically surrounded himself at the board with people that he's known for years. So it makes sense that they would stand up for him. But if the allegations that "The Journal" put forward are accurate and the company sees a big walkout, not just a temporary one, but actual resignations from developers going to other companies, then, look, at that point, he just has to leave.

JULIE HYMAN: Yeah, it feels like the hand is going to be forced at some point. Dan, thank you very much. Our Dan Howley there.