Activision, Inc. develops and distributes content and services on video game consoles, personal computers (PC), and mobile devices.

The Complaint charges Defendants with violations of the Securities Exchange Act of 1934. The Complaint alleges that as part of their effort to boost the price of Activision stock, Defendants misrepresented Activision's true prospects in an effort to conceal Activision's improper acts until they were able to sell at least $483 million worth of their own Activision stock, including a $250 million secondary offering by the Company. In order to overstate revenues and assets during the Class Period, Activision violated Generally Accepted Accounting Principles and SEC rules by engaging in an illegal accounting scheme.

Specifically, the Complaint alleges that Defendants' scheme had the effect of dramatically overstating revenues and assets. The true facts, known to the Defendants but concealed from the investing public, were that: (i) Activision would ship products to retail customers that the Defendants knew or consciously disregarded would subsequently be returned to Activision, usually within 45-60 days of the original shipment; (ii) the Company improperly booked revenue on 'consignment sales' in which the customer had the right to return product to Activision; (iii) when large orders came in from certain customers in Activision's Southern region, certain of these orders would be shipped to the customers, but the products would subsequently be returned to Activision (the physical returns were made to the point-of-origin, i.e., whichever of the third-party manufacturers had originally made and shipped the order); (iv) the Company failed to account for Return Request Authorizations; (v) Activision utilized 'side-letter agreements' with customers, providing extended payment terms or other beneficial terms for the customer that were not included in the formal documentation associated with the order; (vi) there were some products that were so bug-ridden that the problems were never resolved and the products were shipped anyway, only to be returned or require upgrades in the future; (vii) Activision would often re-package old products as being new or updated versions, when, in fact, these supposedly new products were barely different than the preceding versions; and (viii) as a result of the above, the Company's projections and even its reported earnings during the Class Period were grossly overstated and misleading.

On June 2, 2004, the Court issued an Order consolidating cases. The Court issued an Order appointing Lead Plaintiffs and Counsel on July 20. Lead Plaintiffs filed a consolidated Complaint on October 12. Defendants filed a Motion to Dismiss the consolidated Complaint on November 4.

On May 19, 2005, the Court issued an Order granting Defendants' Motion to dismiss. Plaintiffs were given leave to amend the Complaint. The parties stipulated to voluntarily dismiss the case on June 20, 2005.