AAA gaming publisher Activision is now under investigation for possible securities fraud and other unlawful business practices, MarketWatch reports.
The investigation into unlawful business practices committed by the publishing giant is being lead by securities litigation firm, Pomerantz LLP with Robert S. Willoughby acting as the firm’s point of contact for investors and shareholders who have an interest in participating in the class action lawsuit.
Also read: Blizzard Entertainment Advisor Mike Morhaime To Resign In April
The investigation comes amidst a tumultuous time at Activision, which has seen a rapid decline in stock price over the past six months, which was already steadily fluctuating after Destiny 2‘s poor commercial performance. The stocks had started to plummet even further following Call of Duty Black Ops 4 performed below consumer expectations, the announcement that Overwatch‘s Soldier 76 was gay, and Destiny franchise developer Bungie’s decision to discontinue their planned 8-year partnership with them.
Activision’s stock took the biggest hit in the market following the announcement that Bungie was discontinuing its partnership with them and retaining the IP rights to the Destiny franchise during the split. Bungie’s decision to retain the property rights to the science fiction shooter not only meant that a property would be leaving Activision’s publishing division, but also an early cancellation of a deal that was planned to last for 10 years. Activision has lost any financial benefit that the relationship was going to have from the partnership with the developer.
Pomerantz’s investigation into Activision is not the first time one that the publisher has faced. In 2007, the Securities and Exchange Commission launched investigated them for their stock-option grading practices. Recently, the US Federal Trade Commission also launched an investigation into the usage of loot boxes in Call of Duty after concerns that the practice was fostering a gambling addiction amongst youth.
Critics of the company have pointed out that its present financial situation can be attributed to the lack of a wide variety of games beyond Call of Duty, which has been struggling with declining sales since 2014 when Advanced Warfare released. It would have been more beneficial for them to have dedicated development teams for the likes of Skylanders, Tony Hawk, and Guitar Hero and discontinue what many have called the “anti-consumer practices” that many attribute to the demise of those franchise.
Following the numerous executive resignations, employee layoffs, and scandals regarding employee discrimination it is uncertain what lies ahead for Activision in the future. The situation at this point is likely to deteriorate further as their stock price continues to plummet.
What do you think of this news? Are you concerned about Activision’s situation? Let us know in the comments below!
