One of the largest gaming publishers in the world just got hit with layoffs. That lets you know how volatile gaming can be at times. Activision was asked about the layoffs and they confirmed that they did have to let people go from their Minneapolis, Minnesota location due to the poor sales of last year's Guitar Hero Live and Skylanders Superchargers.
I'm sure there are gasps and a few people taken aback given that Skylanders has been one of Activision's premier properties for the past several years, but they explain why the sales were down this year for the series, with Game Informer managing to get a quote out of them, which reads...
As announced on our earnings call, our games for core audiences did extremely well, but the casual audience has not yet emerged on next gen consoles, so we are refocusing to better align with Activision’s long-term priorities because, as always, our strategy evolves to keep us ahead of a rapidly-changing industry. We are working with those impacted by the changes to offer outplacement services and support.
Game Informer was tipped off about the news from a tweet by a spouse from one of those affected by the layoffs. However, the tweet has since been deleted.
According to the article, Activision doesn't specify exactly how many people have been laid off or how many could be affected by this in the future, but they do note that they will be keeping Guitar Hero as a “service-based” product rather than a physical release. This means that they will continue to offer DLC, streaming and online support but another retail release seems unlikely.
Most shocking is probably the drop in sales from Skylanders, and this is due mostly to the fact that Disney Interactive really stepped in and stepped up their game with Disney Infinity to eat into Activision's profits. While Activision notes that the casual audience isn't an audience that has emerged on “next gen consoles”, it should be noted that Disney Infinity's Star Wars line sold extremely well across seventh-gen and eighth-gen platforms, putting their sales ahead of Activision in the toy-based video game accessory department.
Of course, Activision is right in pointing out that attracting casuals to a product is extremely hard, albeit very lucrative. They managed to hit the casual audience many years ago with smash hits like Call of Duty, following the release of Call of Duty: Modern Warfare in 2007, as well as World of Warcraft from out of the Blizzard branch, which averaged between 10 and 11 million subscribers a month for quite some time.
However, trends fade and it's all about finding that next big blockbuster. The Blizzard branch has been knocking it out of the park, with a revitalized Diablo 3, mammoth monthly sales from the card combat game Hearthstone, and their newly cemented MOBA title Heroes of the Storm. It appears Activision may have to go back to the drawing board, as they reportedly scale back on licensed property, including the upcoming Teenage Mutant Ninja Turtles: Mutants in Manhattan and a movie-based game for Ghostbusters, due for release in conjunction with Paul Feig's upcoming film reboot this year.