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.