Legal Action Over Activision-Bungie Split

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Published by Digz 3 months ago

The news of Activision and Bungie splitting had the gaming community speechless, however once the dust had settled an air of optimism and energy from the players filled the vacuum of uncertainty. Hope had once again entered into the franchise whereby Destiny could, ignoring the pun, create their own destiny and drive the game forward to what they knew the game was capable of and fully take control of a game that is amazing and has even greater potential.

So Bungie got their way in keeping the game in its entirety, Activision got the opportunity to stop worrying about a game (Destiny 2) that had in their eyes flopped upon release so everyone was a winner! Think again, up to five law firms have filed a class action lawsuit against Activision Blizzard, the two of which that have joined are Rosen law Firm and Schall Law. 

Since October 2018 to 25 January 2019 share prices in Activision Blizzard have tanked almost 43%, this is in relation to a number of things but one of them being sales of the new Destiny game released in late 2018. The reasons for law suits are given more formally in Rosen Laws and Schalls press releases below, but to summarise very briefly they will no doubt argue that the split was always on the cards and investors should have been made aware of any plans. 

Rosen Law Firm in their press release for their lawsuit against Activision Blizzard state:

According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) the termination of Activision Blizzard and Bungie Inc.’s partnership, giving Bungie full publishing rights and responsibilities for the Destiny franchise, a series of science fiction-themed video games, was imminent; (2) the termination of the two companies’ relationship would foreseeably have a significant negative impact on Activision Blizzard’s revenues; and (3) as a result, Activision Blizzard’s public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.

The Schall Law firm in their release also request anyone who purchased shares between 2 August 2018 and 10 January 2019 that lost in excess of $100,000 USD to contact them in order to join their law suit. In their press release they state similarly to Rosen about investors being mislead regarding the split with Bungie:

According to the Complaint, the Company made false and misleading statements to the market. Activision Blizzard’s termination of its partnership with Bungie Inc., which would give full publishing rights for the Destiny gaming franchise to Bungie, was about to occur. The end of the agreement between the two Companies was likely to have a considerable negative impact on Activision Blizzard’s revenues moving forward. Based on these facts, the Company’s public statements throughout the class period were false and materially misleading. When the market learned the truth about Activision Blizzard, investors suffered damages.

We'll wait and see what happens on this lawsuit, but for both companies and most importantly the games sake we want to move on and hope both can do well in the coming future.

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