According to a report from outlet Direct Feed Games, an outlet that has a strong track record for rumors especially centering around Nintendo, Microsoft and Nintendo are about to get together in a big way in the near future. Not only will some Microsoft games find their way to the Switch, but it looks like the entire Game Pass library might arrive via the magic of streaming.
Oh?
The sad truth is that the die was cast at Activision Blizzard months, if not years, before these layoffs were first hinted. What makes this so exceptionally painful is that there is an understandable mental link between layoffs and poor financial performance. It’s nigh impossible to rationalize or justify 800 people being shown the door as a company reports record sales.
And yet, here we are. Poor planning, a failure to adapt to current market conditions and consumer desires, and too much investment in trends (like toys to life games) has left Activision Blizzard in a place where it needs to make drastic cuts. That’s a thin blanket against the cold reality that executive pay is broken and now hundreds of people are out of work.
Allegra Frank, reporting for Polygon:
Before announcing the layoffs, Activision Blizzard noted that it posted record revenues for the 2018 fiscal year. According to its fourth-quarter earnings report, the company made $7.26B in physical and digital sales, compared to $7.16B in 2017. But CEO Bobby Kotick explained that the numbers failed to meet expectations.
“While our financial results for 2018 were the best in our history, we didn’t realize our full potential,” Kotick said in the report. During the Q&A portion of the investor call, he described the layoffs as a “top-five career-difficult moment for me personally.”
Despite the self-proclaimed underwhelming revenues and the layoffs, Activision Blizzard said that it plans to expand its development teams on key, internally owned games (like Call of Duty, Candy Crush, and Overwatch) by 20 percent. Funding this will come through “de-prioritizing initiatives that are not meeting expectations and reducing certain non-development and administrative-related costs across the business,” according to its fourth-quarter fiscal earnings release. Other non-core positions will be eliminated to rededicate resources toward beefing up its development slate, the team said on the call.
This news is awful. No way around it. Record revenue and cutting 800 jobs. Sure, increasing margins, non-core development, loss of Bungie, blah blah. But 800 jobs?! Banking on a single IP (Destiny) and not anticipating what CEO Bobby Kotick called a “top-five career-difficult moment for me personally” is insane. And how is the loss of 800 jobs not number one?
Per Kotaku reporter Jason Schreier, Kotick took home 28+ million in 2017. I get the reasoning behind highly paid executives; I wouldn’t want their jobs. But to say the loss of 800 jobs is “top-five” is an insult. It should be number one, with a bullet.
I feel for the employees. I feel for fans. I don’t see a great outlook for core Blizzard properties outside of World of Warcraft — a recurring revenue behemoth. And that’s sad. I would have loved to see the A/B 800 reallocated to other Blizzard franchises. If the focus is entirely on a Call of Duty, Overwatch, and Candy Crush, I fear the end of Blizzard as we know it.
Jason Schreier, reporting for Kotaku:
This news comes after a tumultuous year for the publisher, which consists of two entities, Activision and Blizzard. Both Activision and Blizzard operate autonomously but are governed by the same C-suite of executives, including CEO Bobby Kotick (whose salary in 2017 was roughly $28.6 million).
At Blizzard, 2018 was a year full of cost-cutting, under chief operating officer Armin Zerza, whose mandate has been to reduce spending and produce more games. (Other than expansions and remasters, Blizzard has not released a new game since Overwatch in May 2016.) Employees all across Blizzard have been told to cut their budgets and spend less money, and there’s general concern about Activision’s creeping influence as the company looks to make more financially-driven decisions. In October, Blizzard CEO Mike Morhaime stepped down, to be replaced by Blizzard veteran J. Allen Brack—not as CEO, but, notably, as president. In December, Blizzard abruptly killed the Heroes of the Storm esports program and cut down the development team for that game, its least successful.
People who work or have worked at Blizzard told me that they expect Tuesday’s layoffs to be primarily in non-game-development departments, such as publishing, marketing, and sales. Some of those jobs and roles may then fall to Activision proper, further reducing Blizzard’s autonomy.
My recent piece Activision, Microsoft, and Platforms amounted to what I’d consider a nothing-burger. I’d considered the question “what now for Activision?” after they ended their partnership with Bungie, and sought an answer. After laying everything out, short of spelling doom, I didn’t really net out with much other than an allusion of the company leveraging Blizzard’s IP to build a paid platform:
This is certainly a “let’s spend Activision Blizzard’s money” post, but short of spelling doom for Activision Blizzard with the rise of Fortnite, departure of Bungie, and Microsoft’s “Netflix of gaming”, Activision Blizzard needs a model that will continue to drive revenue in a PC world without the friction of a hardware platform. If the battle is lost, Activision Blizzard titles join the ranks of third-party titles vying for the top-spot on other launchers and platforms.
This news of layoffs is what I was afraid of, and I think it will extend passed Activision employees.
At this rate, I see the brand “Activision” as an albatross around Blizzard’s neck. Sadly, at the expense of the employees, they should shed the name Activision, divert resources to Blizzard, and focus on Blizzard’s colorful core and new IP.
Jez Corden, reporting for Windows Central:
At GDC 2019, Microsoft is set to debut a new cross-platform development platform with the goal of bringing Xbox Live support to games on Android, iOS, Nintendo Switch, in addition to PC and Xbox consoles.
Microsoft already has a few games with Xbox Live support across mobile devices, most notably via Minecraft, which requires an Xbox Live login on Android, iOS, and Nintendo Switch. Until now, Microsoft reserved Xbox Live support on those platforms for its own games, but now now, Microsoft is aiming to bring Xbox Live cross-platform play to even more titles. Developers will be able to bake cross-platform Xbox Live achievements, social systems, and multiplayer, into games built for mobile devices and Nintendo Switch, as part of its division-wide effort to grow Xbox Live’s userbase.
Oh?
