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.
Quote from Earnings Report
Bobby 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 Brack
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