Activision Laying Off 8% Of Workforce After Seeing Year-Over-Year Revenue Growth
Activision

The fourth-quarter financials are in and it’s not pretty for Activision… sort of. While the company managed to generate more revenue in 2018 than the year prior, they will be laying off 8% of its workforce, or around 700 employees, according to e-sports consultant Rod Breslau.

The staff cuts weren’t unforeseen. In fact, days before the announcement came there was an article from Bloomberg informing the industry that Activision would indeed be cutting down staff by the hundreds.

Sure enough, when Tuesday rolled around the CEO of the company, Bobby Kotick, made the announcement official that 8% of the staff would be getting the axe.

According to a Niko Partners analyst, Daniel Ahmed, these cuts come amid the company posting a 6% year-over-year fourth quarter revenue growth spurt, and seeing a 14% increase in operating income compared to 2017, netting Activision a healthy $723 million.

According to the investor sheet, total year-over-year revenue growth was up 7% in 2018 to $7.5 billion.

Operating income also increased to $1.99 billion compared to 2017’s $1.3 billion.

But even despite all of this growth in key areas, Activision’s Bobby Kotick is looking ahead for the next fiscal year, and shaving off expenses and losses ahead of time, due to lower forecasts throughout 2019.

According to CNBC, Kotick explained during the earnings call…

“Our restructuring plan sheds investment and less productive nonstrategic areas to our business and will result in a net headcount reduction of approximately 8 percent while also driving a significant increase in investment focus and capabilities around our biggest franchises. We’re confident that over time this plan will enable our teams to accelerate the delivery of high-quality content to our communities.”

Obviously the company has a new Call of Duty in the works, but details on it were not revealed other than that Kotick mentioned it would be their highest quality title yet.

But even still, they just don’t have many games in the pipeline and with the loss of Bungie and Destiny 2, Kotick is expecting a downturn from the games-as-a-service well, along with acknowledging that there are going to be fewer big releases this year than what they had planned…

“In-game execution was inadequate in some of our franchises, and we saw weaker-than-anticipated retail demand. Our 2019 outlook assumes that we will not improve in-game monetization as quickly as we would like and that it is a transition year where we have less new major content to release than we should.”

Companies like Activision were warned back in 2012 that they didn’t seem to have anything long term on the table outside of Call of Duty and World of Warcraft. Activision and Blizzard thought they could get by with the real-money auction house in Diablo 3, but it was a controversial mechanic that was banned in a few regions for violating gambling standards and eventually ended up closing up shop.

Since then, Activision has been slow on the uptick when it came to new brands. Skylanders came and went, proving to be little more than a fad for the whole toys-to-life genre, which is effectively dead. Crash Bandicoot N’Sane Trilogy was a one-off remake that netted them 10 million in sales but wasn’t a long term venture, and World of Warcraft and Heroes of the Storm no longer generate buzz. They also killed off a lot of their own market hype and player community in Overwatch due to the authoritarian governance and all of that Social Justice Warrior nonsense.

Overall, Activision doesn’t have much on the horizon other than a new Call of Duty and Diablo. But, as mentioned, they were warned this would happen given how little they invested into creative new IP, especially since their deal with Bungie saw the development studio retaining the rights to Destiny instead of Activision during the dissolution of the partnership.

Anyway, Ryan Brown from the Daily Mirror has a thread for a bunch of new job openings at places like Electronic Arts and Epic Games. But let’s be real, jumping ship from Activision to Electronic Arts is like taking a teleporter from the very depths of Hades to the volcanic mouth of Mordor.

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Billy has been rustling Jimmies for years covering video games, technology and digital trends within the electronics entertainment space. The GJP cried and their tears became his milkshake. Need to get in touch? Try the Contact Page.

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