The company said that it plans to take a $150 million charge in order to de-prioritize games that aren’t doing as well. Activision Blizzard will cut about 750 jobs. The company had just under 10,000 employees at the beginning of last year. At the same time, the company said that it planned to increase the number of developers for its most popular games by 20%.
Although the company posted record sales in the fourth quarter and in all of 2018, CEO Robert Kotick noted that the company’s performance nevertheless failed to live up to the company’s expectations.
“We didn’t execute as well as we hoped to in 2018, and our current outlook for 2019 falls below what is possible in an industry filled with growth opportunities,” Kotick said on a conference call with analysts. “We didn’t achieve the reach, engagement and player investment goals we set for ourselves.”
The company expects 2019 to be a transition year, predicting that it won’t grow in-game sales as quickly as it had hoped. Kotick said the company will have to make significant changes to achieve its long-term goals, including some back-office support staff reductions, laying off staff at some poorly performing games and focus more on live, streaming game experiences for customers.
Activision Blizzard, meanwhile, hasn’t given its shareholders much good news lately. The company announced earlier this year that it was ending its relationship with the developer behind the successful “Destiny” game franchise. That news caused the stock to fall 9%.
“This industry is very hit driven, perhaps more than ever, and the hits are harder and harder to come by,” said Scott Kessler, an analyst with CFRA. “Activision doesn’t seem to have a big game right now.”
Kessler added…
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