Overwatch 2 and Diablo 4 delays spark 17% decline in Activision Blizzard stock

• Activision Blizzard fell as much as 17% on Wednesday after revealing delays to Overwatch 2 and Diablo 4.
• Activision did not provide an official release window for the games.
• The company said it no longer expects a financial boost from either game in 2022.

Activision Blizzard plummeted as much as 17% on Wednesday after it revealed delays to two of its highly anticipated video game sequels, Overwatch 2 and Diablo 4.

In its third-quarter earnings report, which beat analyst estimates, the video game publisher said both sequels would not provide a financial boost to the company in 2022. Activision never gave an official release window for the games, though they were anticipated by many to be released late next year.

"As we have worked with new leadership in Blizzard and within the franchises themselves, particularly in certain key creative roles, it has become apparent that some of the Blizzard content planned for next year will benefit from more development time to reach its full potential," the company said.

In addition, recently hired Blizzard Entertainment co-leader Jen Oneal is stepping down from the company at the end of the year, which current employees took as a bad sign given the ongoing fallout from Activision Blizzard's workplace culture.

The game delays and departure come just weeks after the company settled a workplace harassment lawsuit with California's civil rights agency for $18 million. The lawsuit hit on sexual harassment complaints that ultimately led to a walkout by Activision Blizzard employees.

While Activision Blizzard will still be able to rely on its annual blockbuster release of its Call of Duty series later this week, the Overwatch and Diablo delays will likely weigh on investor sentiment as its associated revenue and income growth gets pushed out further. Shares of Activision Blizzard are down 29% year-to-date.