“It has been increasingly hard for me to provide leadership and staff confidence.”
Image credit: Blizzard
Blizzard co-founder Mike Morhaime left the company he started up in 1991 with his university classmate because he was tired of constantly butting heads with Bobby Kotick.
An excerpt from Bloomberg reporter Jason Schreier’s upcoming book Play Nice: The Rise And Fall Of Blizzard Entertainment has shed more light on Morhaime’s departure from the company in 2018.
According to Schreier, the Blizzard co-founder was tired of fighting the former Activision CEO on a myriad of issues. Problems reportedly began around six years after Blizzard and Activision merged to become Activision Blizzard, with the cancellation of a World of Warcraft successor project known as Titan.
Following this cancellation – which was said to cost Blizzard around $80m – Activision moved to assert more control over the Diablo maker, and in 2013 Kotick made a deal to buy Activision Blizzard’s independence from Vivendi (Blizzard’s then parent company). Following this, Blizzard was encouraged by Activision execs to hire chief financial officer Armin Zerza to “keep costs in check”, with Kotick clearly bitter about Titan’s cancellation.
Zerza – who had previously worked in the marketing and distribution of products such as detergent and shampoo – came on board in 2015, with the CFO soon looking to nix events such as the company’s annual BlizzCon event due to low profit margins.
“Before Zerza, the company was run by Blizzard lifers and video game enthusiasts, but the CFO brought a completely different mindset,” Schreier’s book reads, adding Blizzard employees would scoff behind the CFO’s back due to his “inability to understand the video game industry”.
Meanwhile, Kotick believed Blizzard was letting down its community by not releasing games and content more frequently, but said he wouldn’t force the developers to release a title before it was ready for launch – something Morhaime along with his own inner circle were said to consider contradictory. “Kotick celebrated when Blizzard produced a new hit but failed to grasp what it took to create one.”
Morhaime continued to battle Kotick in the subsequent years, arguing for the importance of departments such as customer service and Blizzard’s cinematics team (which made short films based on the company’s games), as well the matter of employee bonuses. Kotick reportedly felt the teams who delivered the largest profits should get the biggest bonuses, while Morhaime believed this would stifle creativity and the entire company should benefit from profit sharing.
Morhaime reportedly felt Blizzard was losing its independence for many years, but following a meeting of Activision, Blizzard and King leaders in 2018 themed around unification – or “One ABK” – Morhaime wrote a lengthy email to Kotick. In this email, Morhaime said that Blizzard had reached a tipping point.
“I believe that preserving Blizzard’s culture and magic is a necessity for preserving Activision Blizzard‘s advantage of having an organisation that can attract and retain the best creative talent in the world and that can consistently produce the highest quality games and experiences,” he wrote. “It has been increasingly hard for me to provide Blizzard leadership and staff confidence that Blizzard has a stable future.”
Morhaime had actually submitted a resignation letter prior to this meeting, in 2017, but was convinced by Kotick and others to remain at the company. However, in 2018, Morhaime ultimately announced he was stepping down from his position at Blizzard. While publicly Morhaime made no mention of his ongoing disagreements with Kotick and Activision, those who knew him personally reportedly knew this to be a key reason for his departure.
Following Morhaime’s resignation, in 2021, the State of California sued Activision Blizzard over allegations of a “frat boy” culture that created “a breeding ground for harassment and discrimination against women”. Despite no longer being part of the company, Morhaime released his own statement at this time, writing: “It is all very disturbing and difficult to read. I am ashamed. It feels like everything I thought I stood for has been washed away.”
In October last year, Microsoft purchased Activision Blizzard for the sum of $68.7bn. Kotick subsequently departed the company at the end of December.
