“Activision Blizzard’s public statements were materially false and misleading at all relevant times”
Activision shareholders are being encouraged to join a class action suit that accuses the publisher of making “materially false and/or misleading statements” when the publisher terminated its partnership with Destiny developer, Bungie.
Bungie split with Activision Blizzard in January, eight years into a ten-year partnership. The separation saw Bungie assume “full publishing rights and responsibilities for the Destiny franchise”, while Activision “will increase its focus on owned IP and other projects”. A recent SEC filing covering the 12 month period up to and including December 31, 2018, intimated the company earned $164 million as a result in the “mutually agreed” separation from Bungie.
Kuznicki Law PLLC is now encouraging investors who had purchased shares between August 2nd, 2018 and January 10th, 2019 to submit their claim to the Central District Court of California.
“The filed complaint alleges that defendants made materially false and/or misleading statements and/or failed to disclose that: (i) the termination of Activision Blizzard and Bungie’s partnership, giving Bungie full publishing rights and responsibilities for the Destiny franchise, was imminent; (ii) the termination of the two companies’ relationship would foreseeably have a significant negative impact on Activision Blizzard’s revenues; and (iii) as a result, Activision Blizzard’s public statements were materially false and misleading at all relevant times,” the filing stated (thanks, GI.biz).
In an earnings call last November, Activision COO Coddy Johnson explained that Activision’s MAU were “up sequentially from Q2” thanks to the good performance of Destiny 2’s expansion Forsaken, launched on September 4th, although Forsaken actually performed below the firm’s expectations. Johnson added: “Now while Forsaken is a high-quality expansion with strong engagement and new modes of play, it did not achieve our commercial expectations, and there’s still work to do to fully re-engage the core Destiny fan base.”
The then-CFO Spencer Neumann further revealed that Activision’s Q3 revenue reached $397m (£305m), with the “key contributors [being] Call of Duty digital in-game revenue and Destiny 2: Forsaken, although the latter underperformed [their] expectations”.
Destiny 2 director, Luke Smith then responded to reports that its latest expansion, Forsaken, “did not achieve [Activision’s] commercial expectations”, stating that the development team at Bungie is “not disappointed” in the latest instalment. “We are not disappointed with Forsaken,” Smith asserted via a tweet. “We set out to build a game that Destiny players would love, and at Bungie, we love it too. Building Destiny for players who love it is and will remain our focus going forward.”
