Activision Blizzard Mass Layoffs Will Leave Hundreds Jobless After Slow Sales, According to Report

[Burnouts3s3]

https://www.bloomberg.com/news/articles/2019-02-08/activision-is-said-to-plan-job-cuts-as-sales-of-key-games-stall

A painful stretch for the video-game industry isn?t over.

Activision Blizzard Inc. plans to announce job cuts Tuesday in the face of slowing sales, according to people familiar with the matter, bringing fresh upheaval after spotty results roiled stocks this week. The shares dropped as much as 2.5 percent to $42.88 on Friday.

The layoffs, which could number in the hundreds, are part of a restructuring aimed at centralizing functions and boosting profit, said one of the people, who asked not to be identified because the changes haven?t been announced. Activision employed 9,800 people at the end of 2017.

The game maker, one of the largest in the world, acknowledged on a November conference call that some key titles, such as Overwatch and Hearthstone, were seeing flat or declining numbers of users. After disappointing sales of Destiny 2: Forsaken, the company parted ways with its developer, Bungie Inc., a move that could reduce annual revenue by as much as $400 million.

Analysts expect Activision?s sales to decline by about 2 percent this year, to $7.28 billion.

How Video-Game Giants Are Struggling

The company, which has bulked up over the years through acquisitions, including PC-game maker Blizzard Entertainment and mobile-game company King Digital, has historically given its various divisions considerable autonomy under longtime Chief Executive Officer Bobby Kotick.

Executive Departures
Over the past year, a number of executives have left, including Eric Hirshberg, CEO of Activision Publishing, and Mike Morhaime, the longtime head of Blizzard.

On New Year?s Eve, Activision said it was firing Chief Financial Officer Spencer Neumann -- shortly before he took the same position at Netflix Inc. Tim Kilpin, a toy-industry veteran recruited to lead Activision?s consumer-products division two years ago, retired this month.

Activision isn?t alone in stumbling. Electronic Arts shares fell 13 percent Wednesday after the company confessed that some of its biggest releases disappointed. But it rebounded later in the week.

Take-Two Interactive Software Inc. fell by a similar amount Wednesday after forecasting sales this quarter that were $100 million below Wall Street forecasts. The results were a reminder that video games are still a hit-driven business, rising and falling based on unpredictable consumers.

[tweet t="https://twitter.com/YongYea/status/1094236091744423936"]

I am not the biggest fan of Activision or Blizzard, especially after their recent announcements.

That being said, I do give my sympathies to the employees and hope they find work after this.

 

[Samtemdo8_v1legacy]

First, the Bloomberg article is enough. Never ever show YongYea's face in my presence again please. That guy thrives and propagates negative press for anything.

Secondly. I am worried for Warcraft 3 Reforged, Patch 8.2 Wrath of Azshara, and Classic WOW now.

Amazing, all this because they announced a fucking mobile game.

 

[Silentpony_v1legacy]

First, the Bloomberg article is enough. Never ever show YongYea's face in my presence again please. That guy thrives and propagates negative press for anything.

Secondly. I am worried for Warcraft 3 Reforged, Patch 8.2 Wrath of Azshara, and Classic WOW now.

Amazing, all this because they announced a fucking mobile game.

But is it Yong's fault the news is negative? I mean I'm not mad at Rachel Maddow for talking about Trump - he's kinda important.

 

[The Rogue Wolf]

In a just world, Bobby Kotick would the one jobless.

 

[Chimpzy_v1legacy]

Amazing, all this because they announced a fucking mobile game.

Doubt it. Gamers in general are notoriously weak-willed when it comes to boycotts. If Blizzard announces Diablo 4 or any sequel at all, all would be forgiven and most of the people screaming their displeasure over Diablo Immortal would bend over and present their ass.

No, it's much more likely to be a combination of factors, such as Destiny 2 not performing to Activion's no doubt very realistic expectations. Then, Bungie taking the Destiny ip and bailing on Activision. CoD 2018 (aka Black Ops 4) failing to meet investor expectations, since $500 mil in 3 days is only a lot of money, but not all the money. Black Ops 4 was also the only major title Activions published in 2018 aside from the Crash and Spyro remakes (compared to 12+ games in 2014). And I guess dropping support for competitive Heroes of the Storm cuz it's not popular enough probably didn't help either. Overwatch seems to still be doing ok, but its spotlight as the big shooter du jour got stolen by the battle royales. Oh, and the lootbox controversies. Wasn't just EA pulling that shit.

They've started basically putting all their eggs into 1 or 2 baskets. And when those underperform, which they inevitably do, well... They're probably still making a tidy profit, but by now we know that's never enough.

 

[sXeth]

Amazing, all this because they announced a fucking mobile game.

I'm kind of skeptical that had anything to do with Destiny's 2 slide (if we can call it that. If ditching an IP *costs* you 400 million, I'm not sure how it was that disappointing).

But is it Yong's fault the news is negative? I mean I'm not mad at Rachel Maddow for talking about Trump - he's kinda important.

Its because every single piece of video I see him put out is on bad things and negative press. Jim for all his vaunted reputation, still puts out the occasional positive thing or thought. Hell, Yahtzee who's career is literally slagging off games occasionally puts out positive thought.


Yong may be the best of the doomsayers because he does stick mostly to facts and such, but he still is entirely a doomsayer and nothing else that I've ever seen.

 

[Hawki]

First, the Bloomberg article is enough. Never ever show YongYea's face in my presence again please. That guy thrives and propagates negative press for anything.

Secondly. I am worried for Warcraft 3 Reforged, Patch 8.2 Wrath of Azshara, and Classic WOW now.

Amazing, all this because they announced a fucking mobile game.

Um, read the article. Diablo Immortal isn't mentioned - there's plenty of issues AB is having aside from DI.

Doubt it. Gamers in general are notoriously weak-willed when it comes to boycotts. If Blizzard announces Diablo 4 or any sequel at all, all would be forgiven and most of the people screaming their displeasure over Diablo Immortal would bend over and present their ass.

I doubt that. Bear in mind that:

-A lot of the Diablo fanbase is burnt over D3.

-We already knew D4 was coming before DI was announced. That did nothing to alleviate fan outrage.

-At least a portion of the Diablo fanbase has a victim complex. And while some of that may be justified, once you have a victim complex, it's easy to keep feeding into said complex. So even if D4 is the best game ever, it won't stop the victim complex because they've still got a wealth of material to draw from.

Yong may be the best of the doomsayers because he does stick mostly to facts and such, but he still is entirely a doomsayer and nothing else that I've ever seen.

Don't shoot the messenger. Doomsayers bringing doom or not doesn't change the fact that, um, "doom" still exists.

https://www.youtube.com/watch?v=s2jvANh2aEc

 

[Silentpony_v1legacy]

Amazing, all this because they announced a fucking mobile game.

I'm kind of skeptical that had anything to do with Destiny's 2 slide (if we can call it that. If ditching an IP *costs* you 400 million, I'm not sure how it was that disappointing).

But is it Yong's fault the news is negative? I mean I'm not mad at Rachel Maddow for talking about Trump - he's kinda important.

Its because every single piece of video I see him put out is on bad things and negative press. Jim for all his vaunted reputation, still puts out the occasional positive thing or thought. Hell, Yahtzee who's career is literally slagging off games occasionally puts out positive thought.


Yong may be the best of the doomsayers because he does stick mostly to facts and such, but he still is entirely a doomsayer and nothing else that I've ever seen.

But that's not his fault. He can't just make up positive news stories to balance out the Doom. The AAA gaming industry is terrible and dying and another crash is coming. But that's hardly Yong's fault, he's just reporting the news, not creating it.
Don't get made at him for being a doomsayer, get mad at EA and Activision for being doombringers.

 

[Nedoras]

Well they're over saturating the market with games that all compete with each other, even if it doesn't seem like they do or would. A majority of games coming out from these publishers are designed to keep you playing them constantly, kind of like an MMO. The issue with that is, you can't have large amounts of games being released that all intend on keeping a large playerbase for years. The same thing that happened to MMORPGs over a decade ago is going to happen to the mainstream AAA market now. They're obsessed with "player retention" as that leads to people spending more on a single game over a long period of time, but there's only so many players out there and they don't have infinite time and money. Plenty of people just pick a game or two and stick with it. However Wall Street itself is the main issue. Investors demand constant growth, which is why AAA games have gone in this direction and the publishers can't just go back on it now without those investors getting really pissed. If I recall, they can even sue over it.

As for why those people were layed off instead of higher ups taking a paycut, it's more than simple greed. Wall Street has a habit of loving layoffs if they're done for the reasons listed in the OP. While higher ups taking a large paycut to retain a bunch of employees is a sign of bad times, laying off a bunch of employees to centralize and focus your company to boost profits can be good news to investors. After all, having your fingers in too many pies can be a drain, and restructuring yourself to focus on a few key things can be much more efficient. So fully expect the AAA side of the industry to keep this up until it literally becomes impossible to keep going and they have to find a new carrot to chase.

 

[09philj]

Amazing, all this because they announced a fucking mobile game.

Doubt it. Gamers in general are notoriously weak-willed when it comes to boycotts. If Blizzard announces Diablo 4 or any sequel at all, all would be forgiven and most of the people screaming their displeasure over Diablo Immortal would bend over and present their ass.

No, it's much more likely to be a combination of factors, such as Destiny 2 not performing to Activion's no doubt very realistic expectations. Then, Bungie taking the Destiny ip and bailing on Activision. CoD 2018 (aka Black Ops 4) failing to meet investor expectations, since $500 mil in 3 days is only a lot of money, but not all the money. Black Ops 4 was also the only major title Activions published in 2018 aside from the Crash and Spyro remakes (compared to 12+ games in 2014). And I guess dropping support for competitive Heroes of the Storm cuz it's not popular enough probably didn't help either. Overwatch seems to still be doing ok, but its spotlight as the big shooter du jour got stolen by the battle royales. Oh, and the lootbox controversies. Wasn't just EA pulling that shit.

They've started basically putting all their eggs into 1 or 2 baskets. And when those underperform, which they inevitably do, well... They're probably still making a tidy profit, but by now we know that's never enough.

It's worth noting that despite their overall revenues rose again in 2017, profits dropped considerably.

 

[sXeth]

Amazing, all this because they announced a fucking mobile game.

I'm kind of skeptical that had anything to do with Destiny's 2 slide (if we can call it that. If ditching an IP *costs* you 400 million, I'm not sure how it was that disappointing).

But is it Yong's fault the news is negative? I mean I'm not mad at Rachel Maddow for talking about Trump - he's kinda important.

Its because every single piece of video I see him put out is on bad things and negative press. Jim for all his vaunted reputation, still puts out the occasional positive thing or thought. Hell, Yahtzee who's career is literally slagging off games occasionally puts out positive thought.


Yong may be the best of the doomsayers because he does stick mostly to facts and such, but he still is entirely a doomsayer and nothing else that I've ever seen.

But that's not his fault. He can't just make up positive news stories to balance out the Doom. The AAA gaming industry is terrible and dying and another crash is coming. But that's hardly Yong's fault, he's just reporting the news, not creating it.
Don't get made at him for being a doomsayer, get mad at EA and Activision for being doombringers.

*shrug* He could be giving press to any of dozens of indie games doing well, putting forth ideas on what AAA/AA could be doing better.

Instead he choose to be the pure reporter of the doings of EA/Activision/whoever else.


Its the same sort of crap that irritates me with a lot of political discussion. Yes, what we have is generally terrible. So whats your alternative? the one thats less terrible? Go find one that isn't terrible, or come up with one thats terrible, and use some of your time to promote that instead of retweeting 100 news stories a day about the current lot is terrible.

 

[Lufia Erim]

Then, Bungie taking the Destiny ip and bailing on Activision.

Bungie didn't take anything. Bungie CAN'T take anything. Bungie and Activision had a 10 year 500 million contract for the destiny Franchise. If you know anything about business contracts, you cannot just break one and bail and not expect HEAVY financial repercussions. Especially not bail AND take an IP.

The most likely scenerio is, Destiny 2 and forsaken underperformed, and Activision ( not bungie) decided to cut their losses. But because there was 2 years and x amount of money left in the deal( which activision would have been obliged to give Bungie due to the contract), Activision Struck a deal with Bungie and decided To give them the IP and cut them loose in exchange for what ever money was left on the table. Bungie then agreed to that deal.

That is the only way Bungie could leave 2 years short of the contracts fulfillment AND keep the Destiny IP.

Basically, Activision didn't want the IP no more and decided to cut them loose, rather than Bungie leaving.

 

[Hades]

Amazing, all this because they announced a fucking mobile game.

I'm kind of skeptical that had anything to do with Destiny's 2 slide (if we can call it that. If ditching an IP *costs* you 400 million, I'm not sure how it was that disappointing).

But is it Yong's fault the news is negative? I mean I'm not mad at Rachel Maddow for talking about Trump - he's kinda important.

Its because every single piece of video I see him put out is on bad things and negative press. Jim for all his vaunted reputation, still puts out the occasional positive thing or thought. Hell, Yahtzee who's career is literally slagging off games occasionally puts out positive thought.


Yong may be the best of the doomsayers because he does stick mostly to facts and such, but he still is entirely a doomsayer and nothing else that I've ever seen.

But that's not his fault. He can't just make up positive news stories to balance out the Doom. The AAA gaming industry is terrible and dying and another crash is coming. But that's hardly Yong's fault, he's just reporting the news, not creating it.
Don't get made at him for being a doomsayer, get mad at EA and Activision for being doombringers.

*shrug* He could be giving press to any of dozens of indie games doing well, putting forth ideas on what AAA/AA could be doing better.

Instead he choose to be the pure reporter of the doings of EA/Activision/whoever else.


Its the same sort of crap that irritates me with a lot of political discussion. Yes, what we have is generally terrible. So whats your alternative? the one thats less terrible? Go find one that isn't terrible, or come up with one thats terrible, and use some of your time to promote that instead of retweeting 100 news stories a day about the current lot is terrible.

I do agree with Yong being a bit of a one trick pony with just about all his videos being about publishers screwing up or beings dicks. However in most cases the criticisms laid at the publishers are absolutely valid and worth reporting on. My problem with Yong is that he doesn't do anything beyond it.

However its not really Youtubers that should come up alternative. Its not their job, they do not possess the influence for it and they are neither businessmen nor game developers. The alternatives need to come from within. Publishers must realize what's going wrong and act accordingly but for the most part they are unwilling or unable to do it.

 

[Canadamus Prime]

All I'm reminded of is that when Nintendo was struggling the late Satoru Iwata took a pay cut. Now that Acti-Bliz is struggling they're laying off ground floor workers who make their product and could potentially help the company rebound.

 

[Dreiko_v1legacy]

I guess now these people may not be able to afford phones either.

 

[BrawlMan]

All I'm reminded of is that when Nintendo was struggling the late Satoru Iwata took a pay cut. Now that Acti-Bliz is struggling they're laying off ground floor workers who make their product and could potentially help the company rebound.

Talk about short sighted greed and stupidity on their part. As much as I had some problems with Iwata, I like and respect before and after his death. Acti-Blizz and most of the AAA publishers get none of it.

 

[Aiddon_v1legacy]

All I'm reminded of is that when Nintendo was struggling the late Satoru Iwata took a pay cut. Now that Acti-Bliz is struggling they're laying off ground floor workers who make their product and could potentially help the company rebound.

That's Bobby Kotick for ya; instead of trying to change strategies, instead he just doubles down and looks for a quick buck. It also looks like Acti is trying to consolidate more control over Blizzard

 

[aegix drakan_v1legacy]

All I'm reminded of is that when Nintendo was struggling the late Satoru Iwata took a pay cut. Now that Acti-Bliz is struggling they're laying off ground floor workers who make their product and could potentially help the company rebound.

Talk about short sighted greed and stupidity on their part. As much as I had some problems with Iwata, I like and respect before and after his death. Acti-Blizz and most of the AAA publishers get none of it.

Very much this.

But hey, most companies are incentivized to only care about next quarter, not the long term ramifications of their actions.

This is likely going to hurt them quite a bit in the long run.

Mr Iwata had the right idea, and actually cared about his craft.

That's Bobby Kotick for ya; instead of trying to change strategies, instead he just doubles down and looks for a quick buck. It also looks like Acti is trying to consolidate more control over Blizzard

I can only imagine that they're thinking "Blizzard is our only reliable golden goose right now! We need to exert maximum control so that they churn out as much money as possible!". And when they're told "Guys, you're strangling that golden goose right now with your terrible forced monetization policies!" they won't get the memo until it's far too late.

 

[Chimpzy_v1legacy]

I guess now these people may not be able to afford phones either.

Nah, the people who actually make these decisions will still be able to afford to get a phone, use it once, throw it away and buy a fresh one. Rinse, repeat, day in, day out. Real consequences are for the bottom ranks, not for the top.

 

[BreakfastMan]

We made more money then ever before in the history of the company, so everybody is getting fired baby! The system works!