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Microsoft to reduce gaming division workforce by 9% (1,900 employees), Blizzard President Mike Ybbara announces departure


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WWW.IGN.COM

Microsoft is cutting 1,900 staff from its video game workforce, sources have told IGN.

 

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Microsoft is cutting 1,900 staff from its video game workforce, sources have told IGN.

 

In a message to staff viewed by IGN, Xbox boss Phil Spencer said Microsoft will provide “full support to those who are impacted during the transition, including severance benefits informed by local employment laws.” IGN has asked Microsoft for comment.

 

The layoffs come following the $69 billion acquisition of Call of Duty owner Activision Blizzard. Microsoft is currently worth more than $3 trillion — the second company to ever break that threshold.

 

 

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As part of the layoffs, Blizzard Entertainment President Mike Ybbara announced he is leaving the company.

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Man, I was going to keep reposting the same message until Valentine's Day (as that is when the new year stops being new), but this is just absurd now. I get that this is the letting go of many covid hires but still. Shit's rough.

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WWW.THEVERGE.COM

The cuts primarily affect Activision Blizzard employees.
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Microsoft plans to name a new Blizzard president next week. Allen Adham, Blizzard's chief design officer, is also leaving the company. "As one of Blizzard's cofounders, Allen has had a broad impact on all of Blizzard's games. His influence will be felt for years to come, both directly and indirectly as Allen plans to continue mentoring young designers across the industry," says Booty.

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Blizzard's previously announced survival game has also been canceled as part of these changes. Booty says Microsoft will be "shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development."

To have Matt Fucking Booty providing comment is hilarious. 

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Of course! We've see this time and time again. Large acquisitions, lead to talent drain when they are expected to produce the hits, and only the hits, they are known for. This leads to the EA effect on studios (insert classic meme here) but it also results in the formation of so many new studios/indie teams. when I look back over the last few years, I can honestly say that many of my favorite games have been complete surprises from studios unknown to me. Gaming moves on, even as the traditional model struggle to find ways to reinflation itself each year.  

  • Halal 1
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The destruction of the ABK IPs begins!

This is how these deals are justified by the Investment Bankers.  These cost reductions are part of the "synergies" that are used to calculate the premium that MS paid.

Of course, the REAL value is the desirability of the games that get pumped out -- but they can't put that in a spreadsheet to justify the people. 

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Just now, Dodger said:

Seems weird they would cancel the Blizzard game and not Redfall. Phil's team must really not have liked it. 

 

Redfall is effectively in "maintenance" mode and any remaining costs are going to be miniscule compared to the development costs for the Blizzard project.

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Just now, Commissar SFLUFAN said:

 

Redfall is effectively in "maintenance" mode and any remaining costs are going to be miniscule compared to the development costs for the Blizzard project.

 

I understand they can't cancel it now, I meant cancel it after the Bethesda acquisition. 

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11 minutes ago, Dodger said:

 

I understand they can't cancel it now, I meant cancel it after the Bethesda acquisition. 

 

That's more than likely the result of Microsoft's largely "hands off" approach to its management of the Bethesda entitles post-acquisition, and the "fallout" (pun fully intended!) from that approach with Redfall's critical and commercial reception directly led what appears to be a complete 180 in the management of the post-acquisition ABK entites and the cancellation of the Blizzard project.

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19 minutes ago, Dodger said:

Seems weird they would cancel the Blizzard game and not Redfall. Phil's team must really not have liked it. 

 

Allegedly Microsoft never looked at Redfall and heard good things so they let it go.

 

If Blizzard is cancelling this other thing, and they aren't strangers to cancelling projects, then it was probably more their decision not Microsoft's.

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2 hours ago, Mr.Vic20 said:

 it also results in the formation of so many new studios/indie teams...

 

I wish the very best of luck to those new studios/indie teams in actually finding funding in this capital environment when practically every VC investor has tightened their purse strings, especially for a relatively high-risk industry like this one.

  • True 3
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Looks like Jason Schrier will also have a story about Odyssey and that it was still several years away and not nearly done as a lot of "insiders" have been claiming. So yeah looks like it was just a sunk cost MS is walking away from. 

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1 minute ago, Commissar SFLUFAN said:

 

I wish the very best of luck to those new studios/indie teams in actually finding funding in this capital environment when practically every VC investor is tightening their purse strings.

 

Form an indie studio and then hit up MS for some GamePass funding :troll:

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9 minutes ago, Commissar SFLUFAN said:

 

I wish the very best of luck to those new studios/indie teams in actually finding funding in this capital environment when practically every VC investor has tightened their purse strings, especially for a relatively high-risk industry like this one.

Absolutely true! But apparently all you have to do to safe guard your finances is to add off brand Pokémon. :p 

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5 minutes ago, crispy4000 said:

I wonder if we’ll hear more about where the cuts are.  Blizzard is getting hit, but where else?

I don't have inside information on this deal.

A LOT of them are likely in areas like legal, HR, IT, Finance, Investor Relations, etc.  You no longer need two teams to do comp planning, or benefits administration, or cloud infrastructure, etc.

When the investment bankers are looking for efficiencies, that's what they put on the list.

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4 minutes ago, Dodger said:

Jez Corden reporting that basically all of A/B internal customer service team will be affected and they will outsource with going forward. 

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Microsoft has also shut down departments dedicated to bringing Xbox games to physical retail ... which if you've seen the digital-only Xbox console leaks ... well, you can get an idea of where Microsoft is going here.

All digital future is here 

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2 minutes ago, Brian said:

All digital future is here 

It just saves so much money not to be physically distrubuting games anymore, and we've seen it's what, upwards of 80% of games sales are digital now? We've accepted it pretty much everywhere else, it was going to come for vidya soon enough. Honestly other than like the Vinyl music movement, is there really any physical media doing well these days? I can't remember the last time I bought a cd/dvd/blue ray/physical game disc. 

 

 

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1 minute ago, Dodger said:

It just saves so much money not to be physically distrubuting games anymore, and we've seen it's what, upwards of 80% of games sales are digital now? We've accepted it pretty much everywhere else, it was going to come for vidya soon enough. Honestly other than like the Vinyl music movement, is there really any physical media doing well these days? I can't remember the last time I bought a cd/dvd/blue ray/physical game disc. 

 

 

I’m a dinosaur and use GameFly so yea I play most games on discs. 

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1 hour ago, Dodger said:

Jez Corden reporting that basically all of A/B internal customer service team will be affected and they will outsource with going forward. 

 

1 hour ago, Brian said:

All digital future is here 

 

1 hour ago, Dodger said:

It just saves so much money not to be physically distrubuting games anymore, and we've seen it's what, upwards of 80% of games sales are digital now? We've accepted it pretty much everywhere else, it was going to come for vidya soon enough. Honestly other than like the Vinyl music movement, is there really any physical media doing well these days? I can't remember the last time I bought a cd/dvd/blue ray/physical game disc. 

 

Also from Jez:

 

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Microsoft has also shut down departments dedicated to bringing Xbox games to physical retail ... which if you've seen the digital-only Xbox console leaks ... well, you can get an idea of where Microsoft is going here.

 

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7 hours ago, Keyser_Soze said:

 

Allegedly Microsoft never looked at Redfall and heard good things so they let it go.

 

If Blizzard is cancelling this other thing, and they aren't strangers to cancelling projects, then it was probably more their decision not Microsoft's.

 

Current reporting from Jason Schreier appears to indicate that it was MSFT who pulled the plug and that's the reason for Ybbara's depature.

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