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
Yikes, Blizzard's defenders are even out in force here... after the company releases news of record profits and huge layoffs. Disappointing but not unexpected.
... Did you even read the release? Restructuring is super normal. You think companies are obligated to keep people on when forecasts show it'll be a waste of money and thus unproductive not only for the company but society since those people could be doing other things that are actually needed elsewhere? Wasting money is bad for employees. They'll take a bigger hit than 8% layoffs if they act like idiots throwing resources away.
The most you could logically argue, if you had enough information to do so, is that this particular move wasn't necessary or the best for the business, that they'd do better with some other move. But you don't have that information. Neither of us do -- or can, assuming you're not, say, secretly a top executive at Blizzard.
-
They will break themselves issou....
"Hearthstone's developer team is going to increase by around 20% during 2019."
LOL so what? by 2 people? LOL
number padding and playing word games.
Blizzard has a very stale lineup of games. I am disappointed that they haven't been able to followup WoW with a new MMO to reach similar or greater success it had in 2004-2009.
I have logged thousands of hours into WoW, SC, WC3 and hundreds in Overwatch and Hearthstone and I can say my hopes for Blizzard's future are lower than they have ever been. Each Expansion in WoW has held less attention and HS is the only game I play at this point.
Good ole Bobby Kotick... the gift that keeps on taking..... what a prick
Yeah he has turned WoW into a mount/pet shop of a game.
It is rare to find people that excel at both, but they are out there. When you do find someone who is good at both, should you not utilize them in that way? On my team we have two developers who are also BSAs (business systems analysts). Instead of dedicated one position to all development and the other to all BSA work the two people split the duties and it allows for a lot of flexibility and consistency that we wouldn't have if we only had rigid roles.
This is good as when T5 reaches out to the community it will be through the actual developers and not middle men who are given a script.
Who's to say the 8% of the people that were being laid off weren't part of the problems that everyone complains about across all the games and their platforms?
Everyone just perceives Activision as a bunch of morons, meanwhile ignoring their revenues. They know what they are doing. Everyone has complained about how games are getting stale, OW, HS, WoW, HotS, Diablo, maybe this a rally cry to get more development to make those games better and let gamers discover it than push PR. Seems Apex did quite well with little PR. Sometimes it's needed, sometimes it isnt.
IMO that looks like they are investing in games as a service/online gaming only, because they indeed do not need marketing, just developers that are able to create/copy assets, create more content (remember, more does not equal better) etc. It doesn't look to me like they want to change their current course, they might just abandon regular game releases like Starcraft 2 & Diablo 3 for now, and focus on HS, OW and their remasters because those are generating revenue...
This isn't Blizzard but ACTIVION Blizzard. All that matters is the stock price and that took a dive since Octobre 18 when Blizzcon was already going downhill.
turns out when you have microtransactions that literally print money on their own without much of any work
you don't need employees
What will be forgotten? The derps - or Blizzard as a whole?
PassiVision
Activision = diahrea
McKinsey told them to do it, so they blindly did it
If any of you are interested in how they did the layoffs, here's a good article on how they did it.
In all seriousness though, I'm confused to as why they are prioritizing on getting more developers for a game like Hearthstone while cutting ties with people in charge of PR who are arguably just as important. To those who lost jobs, hopefully, they can find one soon since layoffs suck, especially right before a holiday like Valentine's day.
In many tech companies there is a shift to make almost everyone on staff a developer. Then the developers are expected to take on extra roles that otherwise might be filled by extra staff: Quality Assurance, Product Management, Project Management, and Community Management.
Riot has been doing this for a few years now, and a lot of other tech companies are making a similar shift. The idea is that if you staff your entire company with developers you indeed have to pay individual employees more money but those people are more versatile. 2 Developers that do coding, QA, project management tasks and community relations are more efficient than 1 developer, 1 QA engineer, 1 PM and one CM doing the same thing.
When you see someone like Iksar on Reddit answering questions that's a bi-product of this line of thinking.
I'm not saying my specific examples are exactly what Blizzard is doing here, but it's not surprising they are laying off non development staff. Blizzard is an old company with an older culture. This appears to be a big cultural shift for them that a lot of Silicon Valley has already adopted.
That sounds like a bad idea to me: the skills you need to interact with people and with computers are quite different and there are few people who excel at both.