What Do the Activision Layoffs Reveal About the Gaming Industry?
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A lot of horrible stuff happened throughout 2018 in the business side of the video games industry. Several studios were shut down, and dozens of employees lost their jobs, many without notice. It’s hard to forget about the week Telltale Games shut down, as it was a particularly tragic example. But that was then. Now, in 2019, the most egregious display of corporate carelessness has happened in the Activision/Blizzard layoffs. Over 800 employees lost their jobs on the day of a corporate earnings call, during which CEO Bobby Kotick claimed the company made record profits in 2018. The single event (with some other applied context) shows us why the games industry has so many problems and us why we should care as people on the other side.

There’s no other way to put it; the Activision/Blizzard layoffs were bullcrap. Like Kotick said on the call, just before the layoffs were official, his company had made more money than it ever had before. Thanks to games like Destiny 2 and Call of Duty: Black Ops 4 making tons of money both upfront and through aggressive microtransactions, Activision/Blizzard is swimming in cash. There’s also things like documented tax loopholes and things like that, but that’s a subject for another article. Blizzard’s properties like Overwatch also helped contribute, although the numbers did begin to fall in 2018.

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The problem is, despite these record sales, many of these titles have infamously performed under “expectations.” You see this line in a lot of corporate calls from all sorts of AAA publishers. We hear about millions in sales, everyone seems happy, and then the bean counters show up and express disappointment. It’s ludicrous. It’s because of things like this that Activision and Bungie split up, which actually was a financial blow to Activision. Because Kotick, who makes millions more per year than any of his employees, and his investors wanted to make several billion dollars and only made a couple billion dollars, hundreds of people had to suffer.

Not only did they lose their jobs immediately, but they had to suffer through a corporate “quiet period.” Because these layoffs were so close to the earnings call, Activision/Blizzard was legally forced to keep them secret, even when rumors started to build. So all of these hundreds of people who were laid off, some of whom were there for over a decade, and many more who wound up making it through, had to sit and wait to figure out if their lives were uprooted or not. And for what? To shave some numbers for an already impossibly successful business, chasing growth that literally doesn’t exist.

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This isn’t feasible or sustainable. There is no such thing as infinite growth, and that’s why numbers for games like Destiny or Overwatch eventually start to fall. People lose interest, and you can’t just force people who aren’t interested in games to play them. That’s why microtransactions are the dominant player here, because they let companies like Activision get away with bleeding extra money out of guaranteed customers. In the meantime, because the profits don’t go to anyone but the executives, everyone who puts in the actual work of making the profit-generating games gets tossed under a bus the minute it’s convenient to do so.

This doesn’t just happen at Activision/Blizzard. It happens all over the place, and this layoff event is just the most egregious, embarrassing one. Bobby Kotick and his crew should be ashamed of themselves, but they’re probably too busy swimming in money vaults ala Scrooge McDuck. So it’s up to people like us to make noise, the gamers, the journalists, and the influencers. Options like unionization and co-op businesses have been floated around by the community, and it’s time to explore those options. The games industry is sick, and if a cure isn’t found soon, the venture capitalists and executives who couldn’t care less about games will make sure it doesn’t recover.

Lucas White
Lucas White
@HokutoNoRucas

Writing Team Lead
Date: 02/20/2019

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