Bobby Kotick claims lawsuit objecting Microsoft-Activision deal was “tied to Embracer’s desire to boost sales”

Former Activision Blizzard CEO Bobby Kotick has claimed a lawsuit filed by a Swedish pension fund was made to help Embracer in gaining a “foothold in the California market at the expense of Activision.”

Filed in 2022, Sjunde AP-Fonden AP7 objected to Microsoft’s $69 billion acquisition of Activision Blizzard, alleging that Kotick “rushed” the sale “to avoid the consequences of sexual misconduct scandals.“

Kotick has denied these claims, as detailed in a new court filing submitted last month and made public yesterday (via Game File).

The former executive described AP7’s lawsuit as a “collateral attack on Activision [that] also appears to be tied to Embracer’s desire to boost sales of its games while leaving Activision hamstrung in the development of its own games that competed against Embracer’s titles.”

Kotick and his legal team also filed a counterclaim against Embracer in response to this lawsuit, alleging that AP7 – including its vice chairman Emma Ihre, who is a former executive of Embracer – filed the suit “for ulterior motives, to obtain collateral advantages, and to exert collateral harm on Activision.”

Embracer has denied these claims. In a statement to Game File, the company said it “did not and [does] not need any help from a Swedish pension fund in competing with Activision.”

“There [was] no coordination or collaboration between Embracer and AP7 relating to any of Mr. Kotick’s statements,” it said. “No agenda or instructions were directed from Embracer via Emma Ihre or directly to AP7.”

AP7’s lawsuit also addressed a substantial fall in Activision Blizzard’s stock price in 2021, which it claimed was due to sexual misconduct scandals.

As Game File notes, the decline occured after a California regulator filed a sexual harassment and discrimination lawsuit against Activision Blizzard in July, followed by a Wall Street Journal report about the allegations in mid-November.

AP7 went on to suggest that Kotick “hastily negotiated a merger to protect himself, agreeing to sell Activision to Microsoft for $95 per share” after being faced “with increasing pressures to leave Activision.”

In response, Kotick reiterated his claims that the Communications Workers of America (CWA) submitted “fake” complaints after it “started looking at technology” and realising it as “losing members at a really dramatic rate.”

He has now alleged that the CWA “needed a reason for employees to consider unionisation” and therefore “landed on a clever but unlawful scheme to create the false perception that there were systemic workplace issues at these companies so that it could offer itself as the solution to resolve these fabricated workplace problems.”

In September 2021, Activision Blizzard settled a lawsuit brought forward by the US Equal Employment Opportunity Commission. The company admitted no wrongdoing and set up a $18 million victims compensation fund.

At the time, Kotick said: “There is no place anywhere at our company for discrimination, harassment, or unequal treatment of any kind, and I am grateful to the employees who bravely shared their experiences.”

In his reply to the AP7 lawsuit, Kotick said that Activision Blizzard settled this lawsuit because it was “costly, distracting, and time-consuming.”

“As with any large company, there were isolated incidents of misconduct which were remediated by Activision’s exceptional compliance team. But there were no systemic issues of the sort Plaintiff alleges.”