Microsoft’s Acquisition of Activision Blizzard Results in Layoffs: Examining the Impact on the Gaming Industry
Microsoft’s recent acquisition of Activision Blizzard in October 2023 has come with significant repercussions for the employees of both companies. Approximately 1,900 individuals from Activision Blizzard, Xbox, and ZeniMax are being laid off as a result of the merger. While this development is unfortunate, it reflects a larger trend within the gaming industry of continuous layoffs despite record-breaking sales and revenues in the sector.
The layoffs primarily impact Activision Blizzard, with the current Blizzard president, Mike Ybarra, who oversaw the acquisition, having resigned alongside Allen Adham, the co-founder of Blizzard and director of project management. In an internal note by Phil Spencer, employees affected by the layoffs will be notified directly and will receive severance payments upon leaving the company. While the specifics of the severance packages remain undisclosed, it is anticipated that they will be comparable or even more generous than the six-month packages offered at Riot Games, considering Microsoft’s $69 billion acquisition of Activision Blizzard.
These layoffs align with similar trends observed in other gaming industry giants like Amazon Games, Ubisoft, and various studios. Even Intel laid off over 700 employees in 2023 within the broader computer hardware sector. The fact that these layoffs occur despite the booming sales of gaming hardware raises concerns about the sustainability of the industry’s growth model.
The gaming industry, unfortunately, seems to adhere to an unsustainable pattern of continuous growth, resulting in unpleasant monetization practices within games and cyclic mass layoffs. This raises questions about the long-term prospects of the industry and highlights the need for a more stable and worker-friendly approach to game development.
Developers point to various reasons for this recent wave of layoffs. However, according to data published by GDC in October 2023, and cited by Wired, one of the main factors contributing to these layoffs is the excessive growth in employment during the COVID-19 period. Additionally, the increasing utilization of tools such as generative artificial intelligence in game creation could also contribute to job reductions in the field. Surprisingly, the most affected group by these layoffs appears to be quality assurance testers rather than developers.
While it is disheartening to witness such extensive layoffs in the gaming industry, it is not entirely unexpected. The hope is that a more unionized approach within the gaming industry will provide better long-term support for its employees, moving away from the current pattern of continuous studio acquisitions and closures.
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