Activision has confirmed that the U.K., based development studio, Freestyle Games, has suffered layoffs following a consultation period for affected staff members. The number of the layoffs was not revealed but Activision did confirm that they appear to be moving in a different direction with the remaining staff.
Game Informer managed to get a quote from Activision after explaining that these layoffs originally occurred back in February but the consultation period delayed the inevitable news that Freestyle Games would be downsizing. In the quote that Activision provided, they explained that the casual market just didn't provide the turnout that they expected...
Activision and FreeStyleGames leadership have been considering a range of future options for the studio, and have been consulting with staff to explore all alternatives. The collective team have now reached the end of a consultation exercise and the decision has been made to restructure FreeStyleGames to better align the studio resources with future business needs. We are working with the studio teams to explore options to rebalance staff within Activision Blizzard and its related organizations.
The interesting thing about it is that the two games that did Activision in were Skylanders and Guitar Hero Live. Both games severely underperformed on the market because they were relying on the casual audience to make them money. The casual audience didn't make them money.
What happened was that the revival of Guiatar Hero Live saw stiff competition from the revival of Rock Band 4. Both games came out around the same time and were battling for the exact same audience. This led to sales being dispersed between both games instead of Activision controlling the market alone with Guitar Hero Live.
The company didn't quite see the return on the game as they had hoped. Skylanders suffered a similar fate with the Disney Infinity Star Wars set being released based around Star Wars: The Force Awakens. The strong marketing push from Disney – and the fact that the toy-based game line was booming within the kids market – gave the company a leg up over Activision. Sales for Skylanders suffered in result of Disney taking over the market during that crucial holiday sales period.
With both Guitar Hero Live and Skylanders under-performing in a vital time where they needed to perform well, it gave pause to Activision and resulted in the publishing giant having to cut costs by cutting jobs.
It's not all gloom-and-doom news for Freestyle Games, though. They plan on continuing to work on supporting the online and streaming aspects of Guitar Hero Live. This comes at the expense of them being moved off of an AAA project that they were supposed to be working on following the release of the music-rhythm game for home consoles.
The layoffs at Activision didn't happen in a vacuum, though. We've had a series of news stories where various studios have been cut or shutdown in recent times. 5th Cell, the developers of the popular Scribblenauts, just recently had their latest game canceled and the staff reduced by a significant amount. Lionhead Studios had their latest Fable title canceled and they were shutdown completely. And Sony pulled the plug on Evolution Studios following a less-than-stellar sales display for the troubled Driveclub.
Gaming is a rough market to find success in and even the largest publishers out there still cut back when things aren't all peaches and roses. Hopefully things work out for Freestyle as they attempt to regain their footing working on Guitar Hero Live.