It’s Time For Blizzard Entertainment to Leave Activision

Source: Kotaku

Source: Kotaku

Activision Blizzard had a terrible, horrible, no good, very bad 2018 despite reporting record profits. Sadly, 2019 is not shaping up to be better. Almost every move Activision Blizzard made in 2018 was a misstep. To sum up the damage:

  • BlizzCon 2018, reveals a beloved franchise, Diablo is going mobile with Diablo: Immortal, causing outrage and a petition signed by 45,000 to cancel the project

  • August 2018, released latest World of Warcraft expansion, Battle for Azeroth, widely held as a step backwards from Legion.

  • 100 support staff in Blizzard’s Cork, Ireland headquarters take one-years salary as part of a voluntary program to leave the company

  • Blizzard Entertainment co-founder, Mike Morhaime leaves the company

  • Blizzard ends Heroes of the Storm esports division to cut costs

  • Activision’s CFO Spencer Neumann was terminated for shopping around for another job (landing at Netflix)

  • Blizzard CFO Amrita Ahuja accepts position with Square

  • Tuesday, February 12, 2019, Activision Blizzard laid off nearly 800 employees, including the shutdown of game studio Z2 in Seattle and King Studios in San Francisco.

Despite having “achieved record results in 2018,” it was not enough. During Activision Blizzard’s Q4 shareholder’s conference call, Activision Blizzard CEO Bobby Kotick, said they “didn’t realize their full potential.” Blizzard has no new games to be released in 2019. In a statement to Geekwire, Activision Blizzard said they are

taking important steps to reinforce our foundation for future growth. We’re increasing our investment in game development across our biggest franchises, mobile and geographic expansion, as well as in adjacent opportunities with demonstrated potential, like esports and advertising.

Robert 'Bobby' Kotick   Source: Bloomberg | Photographer: Patrick T. Fallon

Robert 'Bobby' Kotick

Source: Bloomberg | Photographer: Patrick T. Fallon

And between Activision and Blizzard divisions, there were more staff than titles in development. During that same conference call, Coddy Johnson, Activision COO, also said that “mobile is a top priority for us and we think it's one of our largest opportunities.” They will also redirect remaining resources to reinforce current franchises.

Among those who were laid in Activision’s purge, were Blizzard Entertainment’s community development and customer support positions. Blizzard has always prided itself on being community and customer service oriented. While the gaming community, as a whole, has its problems, Blizzard’s community has stood out and above the rest because of their attention to fans and the building of a close-knit community of gamers, influencers, and even people who are just fans of Blizz’s amazing storytelling. Community and customer service has always been a central tenet to Blizzard’s success, while Activision is known for not being consumer-friendly. But Activision Blizzard’s restructuring is focusing increasing shareholder value by capitalize on mobile games, as well as free-to-play and microtransactions.

So where does this leave Blizzard?

When Blizzard Entertainment was acquired by Activision, Blizzard was allowed to work as a separate entity within the company. However, in recent years, Blizzard has become become more and more intertwined with Activision, and it became more apparent in 2018 as Blizzard began to focus on “cutting costs.”

Reception hall at Blizzard Entertainment  Source: Kenji Yamaguchi

Reception hall at Blizzard Entertainment

Source: Kenji Yamaguchi

We know that the mobile game, Diablo Immortal, is being developed to court an audience wildly obsessed with mobile gaming—in China. This could have something to do with Blizzard extending their joint venture with NetEase to publish their games in China through 2023.

But still, the layoffs were a crushing blow to Activision Blizzard employees. The gaming community mourned with the men and women who shaped and monitored the community, communicating with and interacting with fans, answering gaming and lore questions, engaging in conversation, building and maintaining the community that has grown exponentially for more than 20 years.

Dennis Durkin, the former and now recently returned Activision CFO received a “$3.75 million cash bonus and another $11.3 million in as yet unearned, performance-based equity” And Activision CEO Kotick reportedly earns $30 million a year on the backs of Activision Blizzard employees, including the 800 employees who were laid-off to cut costs. And with analysts predicting Blizzard titles like Overwatch and World of Warcraft to go f2p, and Activision Blizzard pushing for more overpriced microtransactions for titles, it’s time for Blizzard Entertainment be free of Activision before it loses its soul. But how? Could Blizzard Entertainment buy their freedom? Or would Activision have to offer them up to the highest bidder?

What do you think the future holds for Blizzard and Activision? What do you think Blizzard’s next move should be?