Malthael Isn't The Only One Reaping Souls - 8% of Blizzard Laid Off, Dev Teams Increasing, Message From J. Allen Brack
Today is filled with news out of Activision. Many non-developer employees at the company were let go and we learned some more information out of Activision's quarterly.
- Employees were let go prior to today's earnings call.
- Activision Blizzard saw record numbers for 2018.
- Hearthstone's numbers stabilized since the last earnings report.
- Hearthstone's developer team is going to increase by around 20% during 2019.
- Activison Blizzard is investing more in developers over other areas.
Blizzard's President, J. Allen Brack, who received the title last October before BlizzCon, wrote a message to the community following the news.
- They continue to be commited to creating "epic games and entertainment experiences".
- They want to maintain their development standards across their game catalog.
- Esports is still a priority and they will continue to produce competitive content.
- To support their priorities, they are reducing the number of non-dev positions in North America.
- Impacted employees were granted severance which included additional pay, benefits continuation, and career / recruiting support.
- Blizzard will continue to work hard towards their mission and our expectations.
Sources
Quote from Earnings ReportBobby Kotick, Chief Executive Officer of Activision Blizzard said “While our financial results for 2018 were the best
in our history, we didn’t realize our full potential. To help us reach our full potential, we have made a number of
important leadership changes. These changes should enable us to achieve the many opportunities our industry
affords us, especially with our powerful owned franchises, our strong commercial capabilities, our direct digital
connections to hundreds of millions of players, and our extraordinarily talented employees.”Blizzard had 35 million MAUsC in the quarter, as Overwatch® and Hearthstone® saw sequential stability
and World of Warcraft® saw expected declines post-expansion-launch. Fourth quarter segment
revenues grew 15% year-over-year to $686 million and operating income increased 51% year-over-year
to $241 million.In 2019, the company will increase development investment in its biggest franchises, enabling teams to accelerate
the pace and quality of content for their communities and supporting a number of new product initiatives. The
number of developers working on Call of Duty, Candy Crush, Overwatch, Warcraft®, Hearthstone and Diablo®
in aggregate will increase approximately 20% over the course of 2019. The company will fund this greater
investment by de-prioritizing initiatives that are not meeting expectations and reducing certain non-development
and administrative-related costs across the business. The company is also integrating its global and regional sales
and go-to-market, partnerships, and sponsorships capabilities. As part of these restructuring actions, the company
expects to incur a GAAP-only pre-tax charge of approximately $150 million, the majority of which is expected to
be incurred this year.
Quote from J. Allen BrackBlizzard Community…
Over the past few months, I’ve met with many people throughout Blizzard, talking about how we create our future. One thing that remains constant: we are committed to creating epic games and entertainment experiences.
Our development pipeline is strong, and we have the largest lineup of games that we’ve ever had. At the same time, Blizzard tries to have a level of craftsmanship and excellence in all that we do. Maintaining those standards as we continue expanding these worlds takes both time and talented developers.
With that in mind, we have plans to add to game development. We are dedicated to bringing you more content across existing game franchises and bringing our unannounced projects to life. Esports and the Overwatch League are also important priorities, and we will continue to produce great competitive content.
To better support these priorities, we need to reorganize some of our non-development teams. As a result, we will be reducing the number of non-development positions in North America and anticipate a related process in our regional offices over the coming months subject to local requirements. This was an extremely difficult decision, and we want to acknowledge the effort of everyone who has contributed to Blizzard. To assist with the transition, we are offering each impacted employee a severance package that includes additional pay, benefits continuation, and career and recruiting support to help them find their next opportunity. These people are members of the Blizzard family—they’ve cared deeply and contributed greatly to our work here and we are extremely grateful for all they’ve done.
As difficult as some of these organizational changes are, I am confident in Blizzard’s future and we will continue working hard to live up to not only our mission, but your expectations. We look forward to sharing everything with you when it’s ready.
J. Allen Brack
Well, in general, more developers is good news.
I just hope game designers are also included in the group.
New content for Diablo? Right.
What about a new IP, Blizz, instead of milking existing things and remaking old games?
This is obviously just corporate speak for "we want to prioritize payout to shareholders and executives over the well-being of our employees and the quality of our products"
You have no idea how the business world works. Layoffs are unfortunate but normal, and if you don't do them no matter what because you stubbornly want what's "best" (but not really) for the employees, everyone goes down with the ship.
Correction: This is what "being a public company that is required to be constantly growing forever or you die, so the company has to literally destroy itself to meet impossible growth goals" looks like. It is sadly becoming more and more normalized in the video game industry. Games literally make half a billion dollars in sales and still suffer losses because this kind of shit has gotten so out of control in budgeting that it has become impossible to make games anymore. It is about every increasing income to the point that there literally is not enough money in the world to appease the goals of shareholders.
@Tuhljinn That is just another symptom of the sick culture of the business world. The idea of perpetual growth is flawed and unrealistic, and the consequences of it are terrifying.
Eat the rich.
@mastertygon Corrections are supposed to correct things, not make them less true.
It's absurd that basic business and econ principles are downvoted here while your rejection of them (and worse, but I'll get to that below) is upvoted. You would be laughed out of any serious, apolitical course on this subject. Heck, even courses run by agenda-driven corporation haters would, when pressed, admit it isn't tenable to never reduce the size of a company regardless of its market situation.
@Jennifer I gave facts. You spew socialist tripe. Standard.
That is an incredibly evil attitude. Says a lot about you. And your previous sentiments are also extremely wrong. The notion that there's a finite pie is absurd. This is a zero sum fallacy. The real trend is strong and obvious: The rich are getting richer, but the poor are NOT getting poorer; they are getting richer, too. This is per objective measurements that really matter (not invented relative measures designed to instill jealousy). Most wealthy people don't come from wealthy families. We can all easily see the pie has been growing, if we care to open our eyes to view the world instead of cherry picking. This is an objective and documented fact, not an opinion.
record numbers, yeah sure.. i'm santa claus btw
you only lost like 50% of your stock price
which turns in to about 20 BILLION dollars lost
who are you fooling here?
Apples and oranges.
Stock price is not how much money the company has in its bank account. It's how much money the shareholders would get if they were to sell their shares right now.
Not even that, it is what all the shares would cost if they were sold at the same price as the latest sold share. If you want to sell or buy all the shares at once, the price can be very different, higher or lower. Mass sales tend to make the price fall...
They see record numbers, yet go all "woe is me" and fire hundreds of people just because they thought they would get even higher numbers.
Didn't J. Allen Brack receive a record bonus for these record numbers? What does the "J." stand for? Jackass?
hope them guys get a jobs soon :( 8% is a whole lot of people dame
After losing more than half of their stock value just in last 6 months, such declarations are not surprising me :D
You can read about Activision Blizzard's stock state from the link below:
https://www.ccn.com/gaming-giant-activision-blizzard-stock-could-get-crushed-again-tonight
They are not doing good. I hope they learn from their mistakes..
Well, as long as Hearthstone is having a 20% increase everything is fine to me. Overwatch has become garbage, Warcraft is only for MMO fans, DIABLO 3 has been overgrinded already, Starcraft is doing alright as far as competetive scene goes. Pretty much HOTS did not make it but otherwise I think its all good news. I feel bad about about those 800 people being fired.. but its the reality of big companies like Activision-Blizzard. They knew the day would come
Wait a second, you just said that WoW (MMORPG) is only for MMO fans? Dont' say. And hearthstone is only for card games fans?
Reskinning WC3 is a great move, in todays society more than everything Nostalgia sells.
*dons know-it-all cap*
Alright, here's the PR translated. It takes a wide view of the scope of markets dependant on moving with emerging improvements to technology.
Right now, the entire industry is hot for developers. There are over 20,000 vacant web developer jobs in the US alone. Most enterprise level companies have open developer positions somewhere in their portfolios. This surge in demand is related to the recent rapid evolution of database structures and applications. Cloud computing, thanks to Amazon and Google, is accessible for any company to integrate, and this has sparked a lot of innovation around the way data and applications are structured, communicate and handle security. The solutions are far more effective as a scalable solution, so every serious company moving forward is looking to hire talent. Their current employees have been building feature sets on current technologies and no one internal has more than a casual education on these areas if they've been working full time on development.
So, with that said, this isn't a "We're pulling on all these developers on cause we just want more *ideas* for great video games!", it's more like, we need to bring people on to help us refactor, educate our own team, move to the cloud, and GOD TRY to have a release where the whole ****in system doesn't crash as soon as we turn it on.
eSports and publicity got hit purely numerically. The amount of resources those aspects demand to produce "good content" was outweighing the public interest and payoff (again, numerically). This is an inevitable exercise for an ultra-corporate entity like Activision. It may not have happened at good ol', salt-o'-teh-earth, independent Blizzard, back in the day, but they probably wouldn't over recruit on other entertainment channels. A company the size of Activision's more likely to make that mistake, and this action is a correction on an over investment. They've acknowledged this as a mistake, hence a rather attractive severance package.
What's the take away? Don't expect a secure job at an ultra-corporate entity. Also, don't worry about those people, they'll get new jobs. They have mf** Blizzard on their resume. The worst thing that will happen is that they'll work at a 'less cool' company.
Seems to me that they are trying to fix things, but I am not sure if they will make it. Honestly, every one of their games feels horrible to play today, compared to previous years. WoW will never have an impact such as in 2008/2009. Hearthstone on the other hand, seems better today than in Feb 2018, but is still far away from being enjoyable.
Well, I guess as long as you enjoy commenting on the forums instead of playing it, all is well, is it not?
DON'T CALL IT A COME BACK!
Moma said knock you out..