Activision Blizzard announced on a quarterly earnings call on Tuesday companywide layoffs amounting to nearly 800 of its more than 9,600 staff, and confirmed its intention to launch a city-based, franchise league for Call of Duty similar to the Overwatch League.
Many of those who will be laid off worked throughout various esports and publishing initiatives, according to a report from Kotaku. The layoffs will affect Activision, Blizzard, King and some of the company's other studios, Kotaku reported. Game development staff is expected to remain largely untouched.
"Over the last few years, many of our non-development teams expanded to support various needs," Blizzard president J. Allen Brack wrote to employees in a note on Tuesday, which was later obtained by Kotaku. "Currently staffing levels on some teams are out of proportion with our current release slate. This means we need to scale down some areas of our organization. I'm sorry to share that we will be parting ways with some of our colleagues in the U.S. today. In our regional offices, we anticipate similar evaluations, subject to local requirements."
Activision Blizzard reaffirmed investors and media participants on the call that it is committed to the Overwatch League, which will begin its second season Thursday. That league did not renew contracts for various production employees in October and is cutting back in other spending areas as well, league sources told ESPN. Despite the changes, the league signed deals with eight franchise owners -- who committed to pay between $35 and $60 million for their spots, according to sources -- throughout the summer and fall of 2018.
Throughout 2017, Activision Blizzard granted their initial 12 Overwatch League owners first right of negotiation to certain future franchise leagues, including Call of Duty, as reported by ESPN in June. While Activision Blizzard confirmed their plans to restructure their competitive Call of Duty environment, the specific timeline to do so was not revealed. Many prospective buyers, such as veteran Call of Duty esports participants, and current Overwatch League franchises anticipate the new Call of Duty league to launch in 2020, sources told ESPN.
New Activision Blizzard chief financial official Dennis Durkin said that the company will launch a new Call of Duty title in 2019, and described that the Activision staff feel it's "the best Call of Duty's ever built." The new game will be developed by Infinity Ward, best known for its Modern Warfare series in the Call of Duty franchise. Activision Blizzard said that in 2018, Call of Duty retained its title of being the best-selling game among titles on consoles.
In the past few months, Activision Blizzard has undergone significant change. In January, the company fired Activision chief financial officer Spencer Neumann, who later joined Netflix. Shortly thereafter, Blizzard CFO Amrita Ahuja left the company to join Square, the payment processing service co-founded by Twitter creator Jack Dorsey. Blizzard founder Mike Morhaime announced his departure last year.
The publishing company has also made massive shifts within their game titles. In December, Blizzard announced the closing of the Heroes of the Storm Global Championship esports league, just one month after it reassured teams that it would continue forward with that league in meetings at BlizzCon in Anaheim, California, sources said. Then, in January, development studio Bungie left Activision Blizzard, taking rights to the game title Destiny with it.
Despite the changes, Activision Blizzard CEO Bobby Kotick opened the earning calls stating the company "achieved record results in 2018." Kotick also discussed that the company will make a big push into mobile games in 2019 -- including the development and launch of a Call of Duty mobile title with Chinese megacorp Tencent, who is a minor shareholder of Activision Blizzard and a media partner of ESPN. King, the Activision Blizzard-owned studio best known for its Candy Crush games, said in the call that it will explore esports as a potential revenue stream.