A report from the business site Bloomberg announces mass layoffs at Activision Blizzard. On Tuesday, hundreds of employees at the company behind WoW, Call of Duty, Overwatch, and (still) Destiny 2 are expected to be let go.
This is supposed to be the announcement: Activision Blizzard allegedly plans to announce the layoffs on Tuesday. The number of layoffs could be “in the hundreds,” according to Bloomberg.
Activision Blizzard is responding to poor sales figures and aims to bring about change. Apparently, Activision hopes to see a boost on the stock market from the layoffs.
Where does the report come from? The US business site Bloomberg reports on the planned mass layoffs. They reference “a person who wishes to remain unnamed because the changes have not yet been officially announced.”
Activision wants stronger centralization, higher profits
What is the idea behind the layoffs? According to Bloomberg, the layoffs are part of a “restructuring” of the company. Allegedly, Activision Blizzard wants to centralize and increase profits.
This is the situation at Activision Blizzard: The company seems like a wavering giant. At the end of 2017, it employed nearly 10,000 people.
However, it has not been performing strongly in recent years. In November 2018, they admitted that key titles are no longer performing as well as they once did:
- User numbers for Hearthstone are declining
- Even with Overwatch, the heyday appears to be over
- And they have even completely separated from Destiny 2, after Forsaken did not sell as well as hoped
Just the loss of Destiny 2 could mean a revenue loss of 400 million US dollars annually, Bloomberg reports. Analysts believe, according to the business site, that sales figures at Activision Blizzard will drop by 2% in 2019.
This is what has happened recently: Additionally, there have been some personnel changes in the company:
- Mike Morhaime, the long-time head of Blizzard, has left the company
- the CFO Spencer Neumann was fired and then started at Netflix
Difficult times for video game giants
This is the overarching market situation: Bloomberg notes that it is not only Activision Blizzard being battered on the stock market, but also Electronic Arts and Take-Two are experiencing such harsh times because their sales prospects for 2019 are not looking too bright.
The video game industry is a business that lives off “hits,” Bloomberg states.
Apparently, analysts do not foresee any hits for 2019 for the companies, or at least not as significant hits as in the past years. Without a “new” Red Dead Redemption 2, 2019 will be weaker for Take-Two than 2018, as per market logic.
Even at Activision Blizzard, the stock analysts currently do not see any revenue drivers in the pipeline.
At the BlizzCon 2018, the mobile game “Diablo Immortal” was roughly the biggest new announcement. The presentation was received very negatively and commented upon by many.
One of the underlying problems for the weakening of established video game giants could be the enormous success of Fortnite.
For months, there have been rumors that Activision is planning a “centralization.” It is allegedly said that Blizzard’s independence will be restricted,
