Activision Blizzard Esports Hit With Layoffs As Overwatch League's Future Remains Undecided

by Wesley LeBlanc on Jul 19, 2023 at 02:21 PM

Activision Blizzard has laid off around 50 employees, according to a new report from The Verge.

This news arrives the same day Activision Blizzard released its Fiscal Year 2023 Q2 results, which highlights a murky future for the company’s esports efforts despite an otherwise financially successful quarter for the Overwatch 2 maker. Activision Blizzard’s results show that net bookings grew 50% year-over-year in the second quarter, from $1.64 billion to $2.46 billion, due to a lucrative Diablo IV launch, an increase in revenue from various franchises, mobile growth, and more. But, despite that growth, the company laid off around 50 employees in Blizzard’s esports department, Activision Blizzard esports senior director of global communication Brad Crawford confirmed to Game Informer.

One person laid off told the publication that this round of layoffs “seems like a significant gutting of Activision Blizzard esports,” while another told it, “There was no warning. This was a complete shock to everyone, and none of us who were laid off were offered any opportunity to switch roles or teams.”

These layoffs precede what might be a large shakeup to Activision Blizzard’s esports efforts, although that will come down to a vote made by esports team owners later this year. Here's what the company's financial results say on that vote:

“As previously disclosed, our collaborative arrangements for our professional esports leagues continue to face headwinds. During the second quarter, we amended certain terms of our collaborative arrangements with team entities participating in the Overwatch League. According to the amended terms, following the conclusion of the current Overwatch League season, the teams will vote on an updated operating agreement. If the teams do not vote to continue under an updated operating agreement, a termination fee of $6 million will be payable to each participating team entity (total fee of approximately $114 million). As of June 30, 2023, a termination liability has not been accrued. Total revenues from the Overwatch League comprise less than 1% of our consolidated net revenues.”

It’s important to note that this potential vote does not mean Activision Blizzard esports, primarily the Overwatch League, will end; it just might be a different program following this vote and moving forward, but only time will tell.

In a statement to Game Informer, Crawford writes, “We remain committed to the future of esports, and we regularly assess how our staffing aligns with our business goals to ensure we can evolve with changing trends and best deliver for our teams, players, and fans. As always, supporting our employees through transition is our top priority.”

These layoffs at Activision Blizzard happened just a day before it and Microsoft jointly agreed to extend their deadline to complete the merger that would make the publisher-developer giant an arm of Xbox’s first-party output. However, Microsoft, Xbox, and Activision Blizzard must contend with the U.K.’s regulatory agency, the Competition and Markets Authority, which blocked the acquisition in April, before it can move forward as planned. Microsoft and Activision Blizzard now have until October 18, 2023, to close this purchase.

[Source: The Verge]

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