SUMMARY
- Activision Blizzard's situation is going from bad to worse.
- The developers of Call of Duty got sued for $680 million right after the recent layoffs.
Things don’t seem to be going well for Call of Duty maker Activision Blizzard ever since it was taken over by Microsoft in October 2023. After letting go of multiple people from the company and canceling projects, it seems like the developer has landed itself in new trouble.
Activision Blizzard was acquired by Microsoft in October 2023. Microsoft sealed its $69 billion takeover of the studio after months of multiple regulatory objections. Notably, it marked the biggest-ever merger and acquisition deal in the gaming sector.
Activision Blizzard sued for $680 Million
The latest report from Bloomberg, reveals that Activision Blizzard has been sued in the US District Court for the Central District of California for a whopping $680 million. The lawsuit was filed by professional Call of Duty players accusing Activision Blizzard Inc. of an unlawful monopoly over professional leagues and tournaments.
The news comes just over four months after the Microsoft acquisition. Ever since the acquisition, the developer seems to be in bad shape. First, soon after the deal, its CEO for over 30 years, Bobby Kotick announced that he would be exiting his venture. This was followed by significant internal restructuring within the company with regard to reporting.
The claims HecZ and Scump are bringing against Activision ⤵️ pic.twitter.com/iuXgJviqL3
— Breaking Point (@GGBreakingPoint) February 16, 2024
Last month, Microsoft Gaming announced that it would lay off as many as 1,900 employees out of its 22,000 workforce, majorly impacting the Activision Blizzard wing. Although the exact number of Activion employees laid off was not revealed, it was confirmed that the layoffs would majorly impact the Diablo 4 game studio.
As part of the layoffs, the studios also announced that it has drawn the curtains on an unannounced survival game which was in development for over two years.
Why was Activision Blizzard sued?
According to the Bloomberg report, the lawsuit was filed by Hector Rodriguez aka H3CZ, a longtime captain of the pro Call of Duty team OpTic, along with Seth Abner aka Scump, an accomplished player in the game. The two claim that Activision holds a rigid monopoly over everything regarding the Call of Duty esports scene. This includes the sponsorships teams can take as well as the tournaments that can be held.
Earlier, multiple groups, such as Activision, GameStop Corp., and Major League Gaming, would organize open Call of Duty leagues and tournaments having a modest entry fee for fans to come and watch top players compete. However, later in 2019, Activision reportedly took over the market and shut down all leagues except for the Activision Call of Duty League.
H3CZ and Scump on the lawsuit they have filed against Activision and the CDL:
“At the moment, Scump and I have nothing to say.” pic.twitter.com/q6PDWhFvwi
— CharlieIntel (@charlieINTEL) February 16, 2024
The lawsuit notes that playing professional Call of Duty became “the ‘esport’ equivalent of professional football.” Before Activision’s interference, the players could profit from the games through sponsorships, endorsements, and social media attention.
However, after the leagues and tournaments came under Activision’s control, players essentially cannot earn compensation from other entities, the lawsuit notes. It further claims that a number of popular CoD teams were allegedly cut out from the competition since they did not want to, or could not agree to Activision’s terms.
The new league was reportedly disliked by fans and players alike right from the beginning since Activision charged organizations a sum of $27.5 million to secure one of the prestigious slots.
The affected players and teams have now filed a $680 million lawsuit against the company. Activision naturally resisted the claims saying, “Rodriguez (aka OpTic H3CZ) and Mr. Abner (aka Scump) demanded that Activision pay them tens of millions of dollars to avoid this meritless litigation, and when their demands were not met, they filed. We will strongly defend against these claims, which have no basis in fact or in law.”
They added, “We are disappointed that these members of the esports community would bring this suit which is disruptive to team owners, players, fans, and partners who have invested so much time and energy into the Call of Duty League’s success.”
One of the claims in the lawsuit, alleges that the Call of Duty League “impermissibly enriched Activision at the expense of the professional Call of Duty players and the teams now under Activision’s thumb.”
Notably, last year, the sister tournament to the Call of Duty League, the Overwatch League collapsed. It remains to be seen if Call of Duty witnesses a similar fate and if the lawsuit causes any damage at all.
