I understood the point, yeah; I still don’t agree with the notion that anyone can make a hit. We can count on hand how many flash in the pans there were that released last year alone. It’s wholly random and more often than not, it leads to more issues that go beyond not meeting expectations. It’s just not how gamedev works, gambles are gambles.
Anyone can make a hit, though the odds are it are astronomically low 
No one said making a hit is guaranteed. But you don’t need to sell 10 million copies for a game to be successful.
There is no guarantee the game you make for Activision is going to be a hit either.
Yes but unlike other, newer developers a dev under a publishing house has some level of job security (which is funny to say considering 1900 people got laid off.) that can offset financial difficulties.
This news angers me as much as the next guy. After sleeping on it a bit and looking into more things but it seems those workers were affected by the tech hiring spree during the pandemic . ABK hired 7000 people between now and the pandemic and Microsoft initially made the bid with them having just a bit over 10k. This is the reason why they had to cut so much, but emotionally I feel they didn’t have to cut and give them 2-4 years to see results ABK can do with their leadership . However, we sadly don’t live in a perfect world to see that . Personally, I understand all of this because I work for a telecom company in Canada that just experienced a takeover as big as this and I saw a bunch of departments getting closed and workers let go due to redundancy . Also, I had positions cancelled on me within the company due to that.
Anyway, corporate world is cold but the pandemic hiring spree in the tech industry played a big part in 1900 being let go
1 Like
It’s constantly short-sited with regards to meeting demand. The easiest thing is to hire and then fire. “Taking pay cuts” for executives doesn’t help “profit goes up” enough to fix anything sustainably either. We need better worker’s rights put into law.
9 Likes
Yeah the Tech firing spree shows how flawed worker rights are in North America . Like even here in Canada we’ve experienced similar but nothing at the level of big tech in the us . I wish the government would fight or push for that rather than the bs they usually fight
I think everyone here and anyone who doesn’t run a business would agree. Unfortunately half of our political spectrum is in favor of less worker protections and would probably be in favor of bringing back child labor. 
5 Likes
I’ve actually seen just that with child labor on Twitter, but it was for small businesses, to employ their own kids and pay just under minimum wage.
1 Like
I’m still wondering what promped ABK to hire 7k dev over the span of 2 years…well yes but did the COD machine became that unstable the they needed that many devs working on them? Insane numbers really.
activision wasnt doing bad revenue wise but they got allegation and stuff thats cause them to get acquired but before that they just wanted to be a COD machine i mean they basically all of their studios to cod nd also vicarious visions into blizzard
A lot of tech companies hired heavily. The reasons why might differ a little but basically businesses were booming and there was a somewhat fierce competition for staff. Those with the money to win those competitions soaked up a lot of jobs.
Microsoft themselves hired 40,000 staff over a 12 month period around 2022, and then in 2023 they laid off around 10,000 people. Microsoft had been hiring ~10k people per year leading up to that, so their hiring increased 3x during that period.
2022 and 2023 were fairly big years for the ABK release schedule. Diablo 4 was in peak production, Odyssey ramped up. At Acti they had labour shortfalls and a rushed schedule for MWIII. They were also working on Crash Team Rumble. I’ve heard of at least one unannounced mid-size game but I have no idea if it was internal to ABK or whether another company was making it with just them publishing (fingers crossed it survived). In any case, it’s not that they had no use for the labour and just hired for no reason. But their fiscal results don’t seem to have satisfied Microsoft’s needs.
Whether ABK would have done layoffs on the same scale without Microsoft, I don’t know. I suspect they would have done ones maybe half the size (educated guess).
Matthew ball did a good write up on the state of the gaming industry before Microsoft had the job cuts last week. It’s a very long read but also has some excellent insight:
One of the big things that many gaming executives and investors bet on was that the explosion that was seen during covid would provide a new baseline and we would then see growth like we did before covid at about 5% a year. Not only did they get that wrong but they didn’t see the inflation numbers and thus the interest rates being as high as we’ve seen the last year or two.
Instead they’ve seen costs rise quite a bit but revenue has flatlined. This was in his article:
In nominal terms, U.S. consumer spend on video games (including software, hardware, and accessories across all platforms, (but excluding Web3/NFTs) was $57.2 billion in 2023, up only 1.1% over 2022, which had fallen 5% versus 2021. Compared to 2021, spending in 2023 is therefore still down 4.1%. Compared to 2020, revenues are up only 2.0%, with an anemic 0.7% compound annual growth rate (CAGR). 2019 is the most favorable comparison, as 2023 is up 27% since (6.2% compounded), but this reference frame is misleading, as 91% of the growth happened in 2020.
These are not great numbers. And worse still, these numbers are nominal in a time that has seen 40-year highs in inflation, with average U.S. CPI up 19% since 2019. In real terms, U.S. gaming revenues in 2023 are 2.1% under 2022, 14.3% under 2021, 13.6% under 2020, and up only 6.9% from 2019 (1.7% CAGR).
None of this exonerates Microsoft from the deep cuts but it does paint a picture of why we’ve seen so many job cuts in 2023 and already in 2024. It’s only likely to get worse for the rest of the year across the industry
4 Likes
Wasn’t it always ABK’s thing to fire and rehire?
Could it be they built the workforce up as they knew they were going to sell the company, so the asset sheet is bigger due to staffing levels rising prior to going to market?
1 Like
Interesting article. Now there’s also something that Americans should understand too: companies like Microsoft are getting much cheaper resources in Europe. It’s harder now to sustain the cost of development teams in the USA when they compete with studios in Poland or even France, England. To put things in perspective, Toys For Bob and Arkane Lyon had the same number of employees in 2020, except that an employee in the San Francisco area makes (at least) twice as much money as an employee in Lyon. So in the end, a silly little game like Crash Team Rumble ends up being twice more costly than Deathloop. It’s easy to predict the death of most Californian studios.
2 Likes
California studios cost more because it’s also a big concentration of valuable talent. Some of the best talents and AAA expertise who are irreplaceable reside there. Don’t think the death of those studios, could see cost cutting solutions like relocation and remote studios implemented.
1 Like
A combination of the Covid boom that didn’t stay and CoD needing more and devs
The more I look at the numbers the more I understand such a purge, it sucks regardless but those numbers are ridiculous
But cheap money dried up, so creating a new big studio for “Beckon of Responsibility: Current Combat” is out of the question.
I enjoy how incapable people seem to be at looking beyond “today”.