Ex Activision CEO Bobby Kotick Claims Embracer Ties Fueled AP7 Lawsuit Over Microsoft Merger, Embracer Denies Any Coordination

Former Activision Blizzard chief executive Robert Kotick has escalated his defense in the ongoing shareholder lawsuit brought by Swedish pension fund Sjunde AP Fonden, also known as AP7, by alleging the case was influenced by ties to rival publisher Embracer Group. The latest filing, shared publicly via the court document hosted on Scribd filing, argues that AP7 leadership connections to Embracer created an unaddressed conflict of interest and that the timing and downstream impact of the lawsuit aligned with Embracer’s competitive and market interests.

Kotick stepped down on January 1, 2024, following Microsoft’s acquisition of Activision Blizzard, but the legal dispute over the deal’s process and value has continued to evolve. AP7’s lawsuit, originally filed in November 2022, alleges that Kotick and the board prioritized a rapid sale to escape corporate scandals and related liability, and that the deal undervalued shareholders because negotiations occurred while the stock price was pressured by ongoing controversies. The complaint also points to Kotick’s potential payout, often described as a golden parachute, as part of the broader argument around incentives and timing.

In his response filings, Kotick disputes the undervaluation narrative, emphasizing that Microsoft’s 95$ per share offer represented a 45% premium at the time it was announced, and arguing that Activision’s post 2022 performance did not meet long term targets, framing the transaction as a favorable exit for investors given the company’s forward trajectory. The new twist is not only the defense of the deal itself, but the attempt to reframe the lawsuit as something that may have benefited a competitor.

In the January 12, 2026 filing, Kotick’s team alleges that AP7 vice chair Emma Ihre served as an Embracer executive when the lawsuit was filed and that AP7 did not address what the filing describes as a clear conflict. The filing further claims Embracer was under economic stress in fall 2022 and that Embracer’s stock price rose after AP7’s complaint became public, asserting this helped Embracer, AP7, and insiders with Embracer exposure. Kotick’s filing also argues the lawsuit’s timing occurred shortly before Embracer disclosed disappointing results and a Dead Island 2 delay on November 17, 2022, and suggests the legal action created negative pressure on Activision during a period when competition for talent and mindshare was intensifying.

Kotick’s filing goes further by attempting to connect competitive releases to the alleged campaign, listing multiple title matchups and claiming Activision delays and cancellations created openings for Embracer releases. This is a high stakes narrative shift because it tries to move the case from a pure shareholder value and process argument into an ecosystem competition story, where reputational damage becomes a strategic lever rather than a byproduct. Whether the court gives any weight to this framing will likely depend on evidence around coordination, communications, and governance safeguards rather than timing alone.

Embracer has pushed back publicly. In a statement to Game File report, the company denied any involvement and rejected the idea that it needed outside help to compete with Activision, saying there was no coordination or collaboration between Embracer and AP7 related to Kotick’s claims.

From an industry lens, this dispute matters because it blends governance, valuation, and competitive dynamics into one narrative package. Investors care about board process and disclosure quality, while publishers and platform holders care about how litigation driven headlines can affect recruiting, partnerships, and release cadence. If the court process surfaces more internal communications, it could create a second order impact on reputations well beyond the original question of whether 95$ per share was fair.

Do you think this lawsuit stays focused on shareholder value and board process, or does the alleged competitor angle become the storyline that actually shapes the outcome?