Activision Blizzard Layoffs May Cause Key Talent to Leave

cageymaru

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Activision Blizzard said the recently announced layoffs at the company may have a negative impact on its business. On page 12 of its SEC filing, the company warned investors that the job cuts may not have the desired effect of saving the company money as "there can be no assurance that our business will be more efficient or effective than prior to implementation of the plan, or that additional restructuring plans will not be required or implemented in the future." The document goes on to explain that the consequences of the workforce reduction "may also be costly and disruptive to our business or have other negative consequences, such as attrition beyond our planned reduction in workforce or negative impacts on employee morale and productivity, or on our ability to attract and retain highly skilled employees." The company also announced that it received up to $164 million from Bungie for the rights to Destiny 2 when the developer split with Activision Blizzard.

Activision Blizzard CEO Robert Kotick announced that it was shedding eight per cent of the company's workforce after talking about the publishing giant's "record revenue" for the year. Kotick appeared alongside Electronic Arts boss Andrew Wilson in a list of the Top 100 Most Overpaid CEOs, too.
 

gamerk2

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Nothing of value was lost. Sooner Bioware and blizzard crash and burn the sooner those bright minds can get together and make something wonderful again.
Which isn't going to happen. The cost of AAA, or even AA development is simply too high, hence why Kickstarter backed games are a thing. Without significant outside funding, it's impossible to make a AAA release nowadays.
 

Lakados

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Which isn't going to happen. The cost of AAA, or even AA development is simply too high, hence why Kickstarter backed games are a thing. Without significant outside funding, it's impossible to make a AAA release nowadays.
Most AAA titles are costing upwards of 200 Million at this point so yeah. That's why any AAA title that doesn't make a cool half billion in the first few months is considered a failure, because less than that and the game literally doesn't make enough to develop the next installment.
 

Lakados

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yeah you cant fire that many people at once to try and affect earnings. it pisses off all the people you didnt fire. you gotta be sneaky and do under 50 at a time for a few months, that way you dont have to report it.
You can do that but by month end employees have caught on and fear sets in, after the 3'rd week of pink slips most of them will have their resume's updated and a few of the better ones will already have started sending them out. Do it that way and you will see your top talent that you may be trying to keep find themselves new jobs out of fear that they were going to loose their job.
 

tetris42

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I love how well this ties into the previous thread about how disproportionately high the pay is for Activision's CEO with several people claiming it's because they're worth it. I like this quote in particular:

PaulP said:
CEOs are paid large sums of money for the same reason professional athletes are: because they are the rare individual that can do that job better than most of the people on the planet
I don't know, I can think of a lot of managers who would be able to focus on get rich schemes based on gambling mechanics, fire record number of employees, then perhaps permanently harm morale and ability to attract talent as a result of the callous attitude towards employees.
 
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NickJames

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Shareholders need to force Kotick OUT. He's overpaid and running every popular franchise into the ground. Sure Activision is going to make some money in the short term but long term they're at huge risk. WoW and COD aren't going to keep them afloat forever.
 

Danny Dawg

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Does anyone else think that if these gaming companies don't fix their mess, it may come that one day Amazon and Netflix will be sponsoring AAA games or owning the studios?
Games are entertainment and they have the download mechanisms in place. All they have to do is rope in the developer talent that is scattered about from these layoffs and studio closures.
 

Lakados

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Blizzard sold it's soul after WoW, they no longer make games as they just add a expansion in now and again for WoW.
WoW was a fluke, Blizzard released a slew of VERY poorly received console titles and was floundering, they were then hired to make the ill fated Warhammer game and when that went belly up they started frantically converting the assets from that over to WoW. If WoW was a flop Blizzard only had a few months left in it at that point.
 

Dan UCF

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Does anyone else think that if these gaming companies don't fix their mess, it may come that one day Amazon and Netflix will be sponsoring AAA games or owning the studios?
Games are entertainment and they have the download mechanisms in place. All they have to do is rope in the developer talent that is scattered about from these layoffs and studio closures.
Amazon game studios is already a thing. Corporations outside of the game industry want a piece of that pie.
 

Lakados

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Amazon game studios is already a thing. Corporations outside of the game industry want a piece of that pie.
There is a lot of money to be made and a LOT of talent that is constantly moving from one project to the next because game dev studios trade talent like god damned baseball cards. Amazon, Apple, Microsoft, and Google to name a few are hiring up talent at a solid rate right now trying to get some new first party titles to market. There is a noticeable demand that the big studios aren't hitting and the pay out if they can deliver on it is too much to pass up.
 

tetris42

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WoW was a fluke, Blizzard released a slew of VERY poorly received console titles and was floundering, they were then hired to make the ill fated Warhammer game and when that went belly up they started frantically converting the assets from that over to WoW. If WoW was a flop Blizzard only had a few months left in it at that point.
Um, what? What poorly received console titles did they release just prior to WoW? The Starcraft and Diablo ports? Yeah, they had some so-so console titles in the early 90s, that was a decade before WoW. Prior to WoW, they had:

Warcraft = bestseller
Warcraft 2 = bestseller
Warcraft 2 expansion = bestseller
Diablo = bestseller
Starcraft = bestseller
Starcraft expansion = bestseller
Diablo 2 = bestseller
Diablo 2 expansion = bestseller
Warcraft 3 = bestseller
Warcraft 3 expansion = bestseller
 

Majinhoju

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I wouldn't be surprised if we're witnessing the downfall of this company.
The Diablo Immortal announcement blunder, firing 800 people. Whoever's left that's not on top of the food chain is probably in for a stressful time.

I've already uninstalled all my modern Blizzard titles as I have no interest in them anymore.
I've since reinstalled modded versions of Diablo (The Hell 2) and Diablo 2 (Path of Diablo) and I'm enjoying the Diablo series again.

I have little faith this company will produce anything I'll truly enjoy anymore.
 

iQuasarLV

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It is a helluva thing when the gods upon high at Olympus-vision have to address the elephant in the room that was the Kotaku article.

When news hits a little too close to home, and investors begin to question the management's competency you have to make a statement. I am surprised that they actually admitted to continuing staff losses and morale issues at Blizzard.

Color me smugly shocked.
 

iQuasarLV

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I wouldn't be surprised if we're witnessing the downfall of this company.
The Diablo Immortal announcement blunder, firing 800 people. Whoever's left that's not on top of the food chain is probably in for a stressful time.

I've already uninstalled all my modern Blizzard titles as I have no interest in them anymore.
I've since reinstalled modded versions of Diablo (The Hell 2) and Diablo 2 (Path of Diablo) and I'm enjoying the Diablo series again.

I have little faith this company will produce anything I'll truly enjoy anymore.
Congratulations sir. You are now aware of the meat grinder that is corporate developers. They that chew you up and spit you out on the prairie for the new meat just ahead (younger more susceptible generations).
 

brentsg

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I wouldn't be surprised if we're witnessing the downfall of this company.
The Diablo Immortal announcement blunder, firing 800 people. Whoever's left that's not on top of the food chain is probably in for a stressful time.
I mean it's possible, but honestly 8% is nothing. When you've had mergers and acquisitions there is always redundancy. I don't doubt that some of the wrong people left, but that just happens.

I went through 25 or so layoffs with a company and honestly we probably trimmed 5-10% 2-3 times before we really started making tough decisions.
 

iQuasarLV

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I mean it's possible, but honestly 8% is nothing. When you've had mergers and acquisitions there is always redundancy. I don't doubt that some of the wrong people left, but that just happens.

I went through 25 or so layoffs with a company and honestly we probably trimmed 5-10% 2-3 times before we really started making tough decisions.
Where did those layoffs come from?

Employment #s
Activision: 9,625
Blizzard: 4,700

If that was centered entirely on Blizzard that would explain a lot of the comments about further attrition and loss of productivity.
 

Rizen

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It's an SEC filing, they have to note the possible risks of their actions, that's how it works.
 

tetris42

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Where did those layoffs come from?

Employment #s
Activision: 9,625
Blizzard: 4,700

If that was centered entirely on Blizzard that would explain a lot of the comments about further attrition and loss of productivity.
The 9600 number is for Activision-Blizzard combined. Activision has more like 4 or 5 thousand.
 

Majinhoju

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Congratulations sir. You are now aware of the meat grinder that is corporate developers. They that chew you up and spit you out on the prairie for the new meat just ahead (younger more susceptible generations).
When I was younger I always thought it would be cool to get into the gaming industry but now that I'm older and have seen so many good studios get swallowed up and destroyed I'm staying far away from it.
 

NickJames

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When I was younger I always thought it would be cool to get into the gaming industry but now that I'm older and have seen so many good studios get swallowed up and destroyed I'm staying far away from it.
Problem with the industry is that there's no unionizing and everyone is essentially contracted to preform a certain job then they are easily let go afterwards. It's a very unstable and unforgiving field.
 

Amorius

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I will probably be wrong on this prediction (I hope I am to a degree), but I have to wonder if this year might be another year of Blizz skipping a Blizzcon. The last year they skipped was blamed on nothing worthy of revealing. After last year's debacle, I can certainly see them not doing it this year...
 

Lakados

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Um, what? What poorly received console titles did they release just prior to WoW? The Starcraft and Diablo ports? Yeah, they had some so-so console titles in the early 90s, that was a decade before WoW. Prior to WoW, they had:

Warcraft = bestseller
Warcraft 2 = bestseller
Warcraft 2 expansion = bestseller
Diablo = bestseller
Starcraft = bestseller
Starcraft expansion = bestseller
Diablo 2 = bestseller
Diablo 2 expansion = bestseller
Warcraft 3 = bestseller
Warcraft 3 expansion = bestseller
RPM Racing
Rock n'Roll Racing
The Death and Return of Superman
Blackthron
Justice League Taskforce

Then ther eare they worked on that never saw the light of day, I don't remember all of them but Crixia and Nomad were costly ones. Nomad was supposed to be based on the GW Necromunda game. Pax Imperia 2, Starcraft Ghost, Warcraft Adventures: Lord of the Clans ... there is a pretty long list. Lastly coming to the hunderds of millions they spent on the Warhammer MMO that they had to shelve which later became the assets for WoW.

They spent almost everything they had left on the Warhammer title, when that was pulled out from them they were letting people go to keep the lights on.

Edit: Found a list of announced projects that never saw the light of day (pre WoW)
Games People Play
Crixa
Denizen
Shattered Nations
Pax Imperia 2
Raiko
Warcraft Adventures: Lord of the Clans
Nomad
StarCraft: Ghost
 
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IndyColtsFan

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Well Bob, that's what happens when you make record revenues, have a massive compensation package among the top CEO packages in the world, and then shed 8% of your workforce "just because." I hope all your top talent leaves and I hope you get fired by the board "just because."
 

emphy

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I suspect it's not only the layoffs, but the systematic reduction of spending on game development by activision-blizzard-king. Despite all the talk of increased cost of game development.

The Superbunnyhop video on tax evasions had a rather enlightening section on that:

The problem is not that games cost too much to make, the problem is that companies are not satisfied with a decent, good or even very good return on investment. They got too jealous of the "successes" in mobile market, where a select few could get away with some rather indie-looking (cheap indie, at that) titles and still rake in billions. Problem with going for that pie is, of course, that it turns out that the market for exploitative money sucking titles is more limited (despite still being huge) than they thought it was.
 
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Lakados

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That's the problem, instead of trying to make a good game. They're just bleeding subs dry on old games
They did a good job salvaging Titan into Overwatch, but Blizzard hasn't announced anything worth while for a long ass time now. Blizzard is WoW at this point.
 

tetris42

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RPM Racing
Rock n'Roll Racing
The Death and Return of Superman
Blackthron
Justice League Taskforce

Then ther eare they worked on that never saw the light of day, I don't remember all of them but Crixia and Nomad were costly ones. Nomad was supposed to be based on the GW Necromunda game. Pax Imperia 2, Starcraft Ghost, Warcraft Adventures: Lord of the Clans ... there is a pretty long list. Lastly coming to the hunderds of millions they spent on the Warhammer MMO that they had to shelve which later became the assets for WoW.

They spent almost everything they had left on the Warhammer title, when that was pulled out from them they were letting people go to keep the lights on.

Edit: Found a list of announced projects that never saw the light of day (pre WoW)
Games People Play
Crixa
Denizen
Shattered Nations
Pax Imperia 2
Raiko
Warcraft Adventures: Lord of the Clans
Nomad
StarCraft: Ghost
You're getting some of your history mixed up.

First, like I said, all those console titles you mentioned were BEFORE their big chain of successes. Every title I mentioned on that list came AFTER that. So all those best sellers were AFTER their console flops, but BEFORE WoW. The console games in no way caused them to be on the ropes 10-12 years later.

Second, Nomad didn't cost hundreds of millions. That was the budget for WoW + 4 years of ongoing support. Nomad was in development for a year, and like you said, the content was rolled into WoW, so it never cost hundreds of millions, and what it did cost was partially salvaged.

Third, except for Ghost and Nomad, all those titles you mentioned are still BEFORE their big hits like Diablo 2, Warcraft 3, even Starcraft for some of them. So even if those drained them, multiple bestsellers would have shored them up.

If you have evidence Blizzard was on the ropes in 2003-2004, let's see it. Again, they were taking in a lot of money from War3 + expansion during that time. If they were almost bankrupt by 2004, it would be because they were betting the farm on WoW, there's no other explanation I'm seeing. That doesn't make it a fluke, that makes it the all-in play. And that's IF they were struggling in 2004 (I have no idea honestly).
 
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DukenukemX

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Maybe the employee's at Blizzard can say, "I go or Activation goes". Either way I'd like to see the talent go someplace where it'll be put to good use, not making mobile games.
 
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Nothing of value was lost. Sooner Bioware and blizzard crash and burn the sooner those bright minds can get together and make something wonderful again.
Honestly Indie studios like CDProject Red, Larian, and all those smaller 2-25people studios do an amazing job. Flying wild hog and so many are doing great things in the wake of these AAA publisher studios.
 

Lakados

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You're getting some of your history mixed up.

First, like I said, all those console titles you mentioned were BEFORE their big chain of successes. Every title I mentioned on that list came AFTER that. So all those best sellers were AFTER their console flops, but BEFORE WoW. The console games in no way caused them to be on the ropes 10-12 years later.

Second, Nomad didn't cost hundreds of millions. That was the budget for WoW + 4 years of ongoing support. Nomad was in development for a year, and like you said, the content was rolled into WoW, so it never cost hundreds of millions, and what it did cost was partially salvaged.

Third, except for Ghost and Nomad, all those titles you mentioned are still BEFORE their big hits like Diablo 2, Warcraft 3, even Starcraft for some of them. So even if those drained them, multiple bestsellers would have shored them up.

If you have evidence Blizzard was on the ropes in 2003-2004, let's see it. Again, they were taking in a lot of money from War3 + expansion during that time. If they were almost bankrupt by 2004, it would be because they were betting the farm on WoW, there's no other explanation I'm seeing. That doesn't make it a fluke, that makes it the all-in play. And that's IF they were struggling in 2004 (I have no idea honestly).
Blizzard was making a different Warhammer title, one that GW ended up revoking the licensing for (or never granted the license for, unsure as to which), the assets for which were then repurpose into WoW, completely unrelated to the Nomad title. Yeah they then bet the farm on WoW, which don't get me wrong I am happy it paid off, I think.... my grades and love life took a huge hit in that 2004-2012 and my wife would probably be happier if I never started that mess but yeah sure. I just really hope they pull their shit together and deliver on Diablo 4 because D3 was wasted potential and they have a lot of story to make up for. I am terrified for what ever they do for a Warcraft RTS though how will they tie that in lore wise with WoW and what will they do with WoW to reflect the RTS, it just screams continuity problems that I don't see any good answers for.
 

velusip

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Which isn't going to happen. The cost of AAA, or even AA development is simply too high, hence why Kickstarter backed games are a thing. Without significant outside funding, it's impossible to make a AAA release nowadays.
That's a great point. However, initial cost for AAA titles is usually blown out of proportion due to an accelerated and regular production cycle. I like to think that what we call AAA is not really what anyone actually wants, but merely what a megacorp has fallen victim to producing on a regular cycle to optimize profits. Scale and conglomeration is part of optimizing for high volume profit, but this isn't directly correlated with quality. In fact, I've been very disappointed with most "AAA" titles for decades and I have generally used the term with negative connotation. "Bargain bin" title is now interchangeable.
 
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