Former Activision Blizzard CEO Bobby Kotick alleges a 2022 lawsuit, filed by a Swedish pension fund (AP7) objecting to Microsoft’s acquisition of Activision, was orchestrated to benefit Embracer Group’s market position and sales. This explosive claim adds a new dimension to the contentious $69 billion deal, previously marred by allegations of Kotick rushing the sale amidst sexual misconduct scandals.
The lawsuit by Sjunde AP-Fonden AP7, filed in 2022, contended that Kotick expedited the sale to Microsoft to evade accountability for workplace issues. Kotick, however, recently submitted a court filing, made public via Game File, refuting these accusations and presenting a counter-narrative. This filing paints the AP7’s action as a “collateral attack” on Activision, designed to disadvantage the company in its competition with Embracer’s gaming titles.
This development shifts focus from the well-documented workplace controversies at Activision Blizzard to a potential corporate rivalry, suggesting the legal challenge was less about shareholder protection and more about strategic market manipulation. The ongoing legal battle underscores the complex interplay of finance, corporate governance, and competitive strategy within the multi-billion-dollar gaming industry.
The core of the Kotick Embracer lawsuit claims
Kotick’s legal team has filed a counterclaim against Embracer, directly implicating the Swedish conglomerate. The former CEO alleges AP7, including its vice chairman Emma Ihre (a former Embracer executive), filed the suit “for ulterior motives, to obtain collateral advantages, and to exert collateral harm on Activision,” according to reports from GamesIndustry.biz. This assertion suggests a calculated move to hobble Activision’s ability to compete effectively against Embracer’s portfolio.
Embracer Group has vehemently denied these accusations. In a statement to Game File, the company asserted it “did not and [does] not need any help from a Swedish pension fund in competing with Activision.” They further clarified that “there [was] no coordination or collaboration between Embracer and AP7” and denied any agenda or instructions being directed from Embracer to AP7 via Emma Ihre or otherwise. This firm denial sets the stage for a potentially protracted legal dispute over the true motivations behind the original lawsuit, which can be further explored via AP7’s official site.
Re-examining the original allegations and Kotick’s defense
The AP7 lawsuit also highlighted a significant drop in Activision Blizzard’s stock price in 2021, linking it to the sexual misconduct scandals that plagued the company. This decline followed a lawsuit filed by a California regulator in July and a Wall Street Journal report in November that same year, detailing the allegations. AP7 suggested Kotick “hastily negotiated a merger to protect himself” amid “increasing pressures to leave Activision.”
Kotick has consistently countered these claims, including previous allegations that the Communications Workers of America (CWA) submitted “fake” complaints to bolster unionization efforts. He now alleges the CWA “needed a reason for employees to consider unionisation” and concocted a “clever but unlawful scheme to create the false perception that there were systemic workplace issues.” Regarding the 2021 lawsuit settled with the US Equal Employment Opportunity Commission for $18 million, Kotick maintained it was settled due to being “costly, distracting, and time-consuming,” stating there were “no systemic issues of the sort Plaintiff alleges,” only “isolated incidents of misconduct.” More details on the EEOC settlement can be found on official government sources, such as the EEOC website, and context on California’s regulatory actions can be found on the California Civil Rights Department website.
The latest claims from Bobby Kotick introduce a complex layer to the Microsoft-Activision saga, moving beyond the internal workplace issues to spotlight potential inter-corporate machinations. While Embracer firmly denies any involvement, the allegations of a strategic play to influence market dynamics will likely fuel further scrutiny from investors and regulators. The ultimate resolution of this multi-faceted legal battle will undoubtedly reshape perceptions of corporate ethics and competition within the global gaming sector, setting precedents for future mergers and acquisitions.
