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Blizzard Entertainment President Stepping Down Amid Lawsuit

J. Allen Brack is leaving Blizzard 'to pursue new opportunities,' the company says.

J. Allen Brack, president of Activision Blizzard's  (ATVI) - Get Activision Blizzard, Inc. Report Blizzard Entertainment, will be stepping down from his position after the video game maker was hit with a lawsuit over its alleged "pervasive frat boy workplace culture."

Activision Blizzard, which is scheduled to report second-quarter earnings on Tuesday after stock markets close, was falling nearly 3% to $80.26.

Stocks Turn Lower on COVID Worries and China's Clampdown

Brack "is leaving the company to pursue new opportunities," said Activision Blizzard, whose key product franchises include "Call of Duty," "World of Warcraft" and "Candy Crush."

The company said in a statement that Jen Oneal and Mike Ybarra will co-lead Blizzard.

Oneal is the former head of Vicarious Visions, which is now part of Blizzard Entertainment. She joined Blizzard in January as executive vice president of development. 

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Ybarra joined the company in 2019 after several as executive vice president and general manager of platform and technology after several years at 20 years with Microsoft's  (MSFT) - Get Microsoft Corporation (MSFT) Report Xbox.

The company was recently 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.

"Both leaders are deeply committed to all of our employees," Activision Blizzard said in a statement, "to the work ahead to ensure Blizzard is the safest, most welcoming workplace possible for women, and people of any gender, ethnicity, sexual orientation, or background; to upholding and reinforcing our values; and to rebuilding your trust."

Last week, a group of employees organized a walkout to protest working conditions at the video game maker.

I am confident that Jen Oneal and Mike Ybarra will provide the leadership Blizzard needs to realize its full potential and will accelerate the pace of change," Brack said in a statement.

Meanwhile, U.S. video game companies were moving lower Tuesday after reports suggested a potential crackdown on online gaming in China.

The state-backed Economic Information Daily newspaper Tuesday described online gaming as "spiritual opium," and called for stricter curbs on the sector, arguing that "no industry, no sport, can be allowed to develop in a way that will destroy a generation."