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Activision cuts 500 jobs but claims COD, Blizzard growth will preserve headcounts

Wed 09 Feb 2011 10:44pm GMT / 5:44pm EST / 2:44pm PST
BusinessPublishing

Music titles axed: "We simply cannot make these games profitable"

Activision Blizzard

Headquartered in Santa Monica, California, Activision Blizzard, Inc. is a worldwide pure-play online...

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Activision Publishing boss Eric Hirschberg has shone further light on the publisher's "difficult decisions" to axe divisions including its music games.

Guitar and DJ Hero "demand declined at a considerable pace" despite strong critical reception. "We simply cannot make these games profitable based on current market and demands."

Also cut was True Crime: Hong Kong, with Hirschberg claiming that it was "not going to lead to a title at or near the top of the open world genre. To be blunt it just wasn't going to be good enough."

Hirschberg felt that these were "the right decisions being made for the right reasons" and would lead to a "leaner, more focused organisation."

500 jobs were due to be lost as a result of the cuts, with other internal developers believed to have been affected.

In its results filing, the publisher claimed that "the plan is expected to be implemented in the quarter ending March 31, 2011, resulting in a net pre-tax charge in the first two quarters of 2011, which is expected to total between $35 and $50 million, comprised of severance costs, the costs of other separation benefits and other exit costs."

However, Activision Blizzard CFO claimed that, because the publisher would be more heavily investing in Blizzard and Call of Duty games, "net head count at end of year is probably not going to be materially different.

One of these initiatives is a new Call of Duty studio and online platform, Beachhead, and a free to play CoD spin-off for China. "After all is said and done I don't think our headcount will be that materially different. It will just be more profitably attributed."

The publisher is also persisting in a number of licensed titles, including Spider-Man, Transformers and X-Men, and has promised a new "broad entertainment franchise which brings together toys, games and online in an unprecedented way." This will be revealed at at Toyfair next week, and released in the latter months of 2011.

8 Comments

Christopher Bowen
Owner, Gaming Bus

118 0 0.0
So headcount from these other, divergent properties will be reallocated to Call of Duty. I'm sure that's going to make morale SUPER around the office.

"Hi, guys, glad you could all be here. Just wanted to let you know we're shitcanning all of you, but that's OK, because we can eventually rehire you to be a part of the million people we've got summarily beating Call of Duty into the ground the way we did the entire music game industry. What's that? You, in the back? I'm sorry, I know you worked for me for three years but I can't place your name... Tom? Go ahead... oh, what's going to happen when Call of Duty eventually stops selling because we shoved it out there so Mr. Kotick could buy another boat? Well, we'll shitcan you again. But you're used to that, right Tim? Haha... oh, I'm so witty. That's some executive humour right there! So go! Back to work! We have three of these things in development, and we need those DLC packs churned out!"

Edited 1 times. Last edit by Christopher Bowen on 9th February 2011 11:20pm

Posted:3 years ago

#1

Neil Millstone
Director

32 12 0.4
It's always sad when this sort of thing happens, as it seems to all too often at the moment.

I hope those who lose their jobs out of this can find something new soon.

Posted:3 years ago

#2

Graham Simpson
Tea boy

220 7 0.0
That's a very emotional post Christopher. I presume if you were a shareholder you would have the same view....

Posted:3 years ago

#3

Neil Hughes
Site Manager

4 0 0.0
Although most would agree that The Guitar Hero franchise was on it's last legs anyway, it would be quite sad and maybe foolish for them to put all their eggs in one basket. There's already a COD backlash beginning so let's hope they spend some of their massive profit margins on something fresh, new, exciting but I fear this won't be the case.

Posted:3 years ago

#4

Klaus Preisinger
Freelance Writing

953 804 0.8
I wouldn't say the music genre was in its last throws, there are still 7-9 new Singstar versions coming out in Germany every year. Each year Activision made a bet on selling big giant hardware boxes and expensive games with a scattershot music selection.

Compare that to Singstar, which has fewer songs per disk, a lower price per disk and a higher "songs which I like" density per disk. At 30e per disk, Singstar seems to be much more attuned to the price range the typical Singstar customer is expecting.

Posted:3 years ago

#5

Mike Clegg
Marketing/Design

15 0 0.0
I agree with Klaus. Singstar know their market quite precisely. Activision knows what has worked for them - and no doubt what hasn't worked. But I wonder if they know why?

Posted:3 years ago

#6

Bostjan Troha
CEO

30 12 0.4
Christopher, the headcount will remain the same, but the jobs are going to China.

Posted:3 years ago

#7

Terry Rowles
Studying games art and design

2 0 0.0
Hi all. If this was not good news for the gaming industry to see so many talented people lose their jobs and being a student in my first year at Norwich city College games art and design now thinking about going into the business and leaveing a 16 year job to do. I'm wondering whether I made the right choice. I'm a big fan of true crime and to see this game gets shelved so close to finishing well what can you say my heart goes out to these people who lost their jobs and hope they get back into the swing of it soon. Good luck chaps

Edited 1 times. Last edit by Terry Rowles on 27th February 2011 8:31pm

Posted:3 years ago

#8

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