Activision plans to close a Blizzard studio in France that employees 400 people, sources tell Bloomberg's Jason Schreier.
Activision's creeping control over business partner Blizzard has affected everything from games development, management shakeups, and long-term focus. This shift was slow, and accelerated back in 2018, the same year that Activision-Blizzard made a record $7.5 billion in revenue.
The new plan saw nearly 900 employees fired across non-game development divisions like marketing and HR. That money was taken and re-allocated into its new four-part plan, which emphasizes games development, live services, mobile ports, and engagement models over all things.
Activision-Blizzard's new four-part plan dominates every aspect of its business.
- Major Content Releases - Activision-Blizzard is aggressively ramping up games development on new projects, including Blizzard's plethora of new titles.
- Live Operations - With new games, comes new opportunities for live services to expand the experience over time. The company will drop new content updates in both old and new games, including DLC, expansions, and free content more frequently.
- Mobile Ports - All of Activision-Blizzard's biggest franchises will get mobile ports of some kind. This will churn even more monetization and microtransaction earnings while acting as mass-market advertisements for its biggest IPs. As more people play mobile games, they more they'll spend, and the more likely they are to buy into a premium release like Diablo IV. This should be doubly true for Call of Duty mobile, which is rolling out to China via Tencent.
- New Engagement Models - This tier is all about monetization and getting people's attention. Warzone's cross-game, cross-platform, and free-to-play connectivity is a major innovation with engagement models. eSports will be a part of this moving forward--Activision-Blizzard has two major powers right now with the Overwatch and Call of Duty eSports Leagues--and aims to increase revenue via advertising, spectating, and competition. There's also the classic microtransactions.
Fast-forward to 2020 and the company is still cutting off pieces of itself to maximize revenues. Now Activision-Blizzard plans to shutter an office in France that's responsible for marketing, localization, and customer support. Roughly 1/4th of the office had already been laid off earlier this year with severance packages, and the remainder are believed to be absorbed and moved to other offices in Europe.
Activision-Blizzard explained its mass job cuts in a 2018 earnings report presentation.
Activision-Blizzard gave an interesting statement to Bloomberg--a statement that underlines the company's raison d'etre:
"Over the past year we have been exploring how we might best integrate our capabilities across the business, enabling us to better leverage talent, expertise and scale as we adapt to the needs of a fast-paced, highly-competitive, digitally focused industry," the statement reads.
The last part is tremendously important and exposes the heart of the company's business model. So far the four-part plan has worked very, very well. Call of Duty Warzone is the major culmination of everything Activision-Blizzard has done so far, and represents the most important thing the company has ever done.
Expect all of its major franchises to have its own Warzone-esque component that connects mainline titles with monetized, free-to-play cross-platform titles designed specifically to maximize engagement and revenue through in-game purchases.
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