Shares of video game maker Activision Blizzard (ATVI) - Get Report were falling Thursday following a report that the company's culture was responsible for the mishandling of the production of its most popular game.
The company was served with a lawsuit from the California Department of Fair Employment and Housing, alleging the company's "pervasive frat boy workplace culture" resulted in female employees being subjected to sexual harassment and being paid less than men.
Activision shares fell $1.40, or 1.5%, to $89.77 in afternoon trading.
The state's lawsuit alleges that the company's executives and human resources department knew of the harassment and failed to take steps to rectify the issues.
Women working on the "World of Warcraft" team said male employees would "hit on them, make derogatory comments about rape, and otherwise engage in demeaning behavior," Variety reported after seeing the DEFH complaint.
"We value diversity and strive to foster a workplace that offers inclusivity for everyone. There is no place in our company or industry, or any industry, for sexual misconduct or harassment of any kind," Activision said in a statement.
Blizzard Entertainment fumbled the production of the remake of its Warcraft III game, which is one of the most popular games in the world, due to mismanagement and financial pressures, according to a Bloomberg report.
Warcraft III: Reforged was widely criticized when it was released for being buggy and not updated enough to warrant a re-release.
The company eventually ended up offering customers "no-questions-asked refunds" for the games, based on the botched project.