Oof. Really sorry to hear that.
I don’t have a full transcript of the investor call, but there is audio posted on their investor page. Here’s Activision’s COO Coddy Johnson supplying more detail on why they parted ways with Bungie:
"First, as you know, we didn’t own the underlying Destiny IP, and we do for all our other major franchises, which we think is not just a differentiator for us in the industry, but also controlling the underlying IP gives us the chance to move into new experiences and new engagement models, which also come with new revenue streams and of course structurally higher economics, when you own the IP.
That leads to probably the second factor in our decision process, which is, Destiny is highly critically acclaimed, high quality content, but it was not meeting our financial expectations.
Finally, as you can guess, our scarcest resource is our people’s talent. Destiny was tying up some of that talent. Now, under the arrangement we’ve reached, that talent will be freed up after a short transition period."
And they just got rid of a bunch of that resource. Late stage capitalism at its finest.
I really think Activision needs to be made an example out of if it’s at all possible.
I find it distracting that Jim Sterling is so morbidly obese.
I really don’t understand the general reaction to this because it all seems like selective observation, people only focus on what aligns to their narrative. (I don’t mean this forum, but the general reaction from Jim Sterling and everyone else)
In particular I don’t understand how you can support capitalism in general but then complain about this specifically as if it’s some separate vicious form. Because I don’t think it is. So I offer a counter example:
Imagine that you have a company making some successful online game. You’ve hired a bunch of community managers to keep the forums clean and whatnot. But at some point you decide there’s nothing to gain from that, that those forums are just a toxic place in general, and to just axe them and use other venues.
Now, if firing people is not a reasonable possibility, it means you are stuck with an army of community managers that aren’t anymore needed, that have literally nothing to do. While you might want to actually hire more people in those areas that need to be expanded, but you can’t because you have to preserve those now useless jobs elsewhere. You need a flexibility to transform and evolve the company, but you can’t because you’re stuck with a monolithic structure that cannot adapt to the passage of time.
You are essentially stuck in a illogical position. From a general point of view what you are trying to do is firing one person so that you could hire two. There’s a net gain of “people with a job”, so shouldn’t it be all good?
Nope, because that guy that actually had a job was booted out without much care. He would be collateral damage sacrificed for the greater good. And the greater good here is, at least at the level of the narrative, “for everyone”. Because bigger profits and growth lead to more jobs. Different jobs maybe, people being shuffled like in the depths of classic hell, but the “net gain” would be there and you come out of this picture with “more jobs”, overall.
My point is that you cannot embrace capitalism while then complain selectively against some of its features and thinking they are separate from the model itself.
But at least this is the truth, without that selective vision: Activision is creating more jobs… while sacrificing others.
I don’t think it’s good, but I also don’t think you can say it’s not good if at the same time you embrace capitalism in general. And essentially I see all these people who mourn for those jobs like crocodile tears. Or at least an heartfelt sentiment that makes no difference because at the end you believe in the system anyway.
You’d only be hoping that this would happen just a little more “gracefully”, behind the scenes. With a smile.
Because it kind of is? It’s not about making a product and keeping a profit. It’s about infinite, rapid short-term growth to make shareholders happy so your stock rises. If making $7 billion dollars means your stock’s value is halved, the system is broken. Hence the distinction made by many of “late-stage capitalism”.
They’re making a massive profit, but it was “short of expectations” so the stock dropped in price. Expectations are basically “the best you’ve ever done only 50% better,” now. That isn’t sustainable by anyone.
This presupposes that I embrace capitalism lol, which I surely don’t. I find it to be a horrible idea, from the ground up. It promotes every bad inclination that people can have.
Even if you love capitalism, the problem in this specific scenario, is that Blizzard, when left to their own devices, has a very proven track record. Micro managing their activities, from the outside, with no real idea what or why the culture they’ve developed works, is the problem. It’s also the long history of Activision destroying people they’ve acquired.
Blizzard does things that almost no one else would do. They are not “efficient”, they are artists at the end of the day. When business people try to make artists “more productive”, they always kill the goose that lays the golden egg.
Corporate, pathological greed, being placed above all else, is the root of a lot of problems in this world.
That’s the selective narrative.
If we stick to what they say, since it seems that it is what we’re doing anyway, what they are saying is that they are firing 8% of the workforce in order to increase it by 20%.
-8% out.
+20% in.
Now they probably “gamed” those values because how they are also selectively chosen, too. But the capitalism model is built on the “factual” rhetoric that says that, when you come to the full circle, there was a net gain in the end. Including an increase of people employed.
As I said that cut is just collateral damage so that, when it comes full circle, there’s an increase of people employed.
We haven’t seen any evidence they’re hiring more people though.
This isn’t classical capitalism. It’s exploitation of companies for short-term gain to the investors an board of directors. There is no long-term plan. Hell, those disappeared back in the 90’s for the most part. Now you get your company big enough that investors buy stock and then drive it into the ground so you can cash out and let the whole thing burn. After that you get hired someplace else and repeat the process.
Once again selective thinking.
You’re saying there’s no evidence they are hiring, while being sure they have no long-term plans, on the absence of which you have no proof.
They’re increasing the developer workforce by 20%. What percent of their headcount is considered a developer? What about artists?
Yeah, in 2016 point Overwatch had 100 developers on it. That’s one of their biggest IPs at the time.
Most games have teams of like 30 or less. I think the most any single game has ever had was WoW and most people estimated there were maybe 200 devs.
They likely wont break 100. They sure as hell won’t be break 1700.
Edit: Here’s the entire WoW dev team while they were working on Battle for Azeroth:
Gamers and developers prior to MMOs couldn’t even imagine the concept of perpetual development income… Even with that and DLC purchase monetization, it’s not enough for the machine.
Here’s the thing though. Even if Activision Blizzard were making record profits that doesn’t mean every division was contributing to that record profit. If the esports was such a money sucker and was a failure why should they keep it around just because the company overall is making lots of money?
Even if you don’t think they’ll hire a bunch on the developer side, why do you think the system is broken because they want to stop investing in the not working parts of the business and invest in their development teams (where the bulk of their money comes from)?
I get frustrated when I see this issue crop up, because most people have no idea how investing works. In this instance, I see a lot of people (not specifically here, but around, and even Jim Sterling mentioned it) Satoru Iwata choosing to take a pay cut instead of “punishing” his employees at Nintendo when sales fell for the 3DS in 2011. They point to this example and say, “Why can’t all CEOs stand up and take one for the team when they need to?” This is hilariously naive. It worked for Nintendo because Iwata and Miyamoto are held in high esteem by everyone. They almost have the Steve Jobs cult of personality, so if they say they’re sorry, and they’ll take steps to improve the next year of sales, people believe them and are willing to accept their pay cuts as evidence of their dedication. Investors give them a do-over.
Bobby Kotick and most other CEOs can’t do that. No one gives a shit about Bobby Kotick’s vision. No one thinks he’s a genius. Volunteering to take a pay cut and asking for another chance does nothing to raise investor confidence because it doesn’t actually show that concrete steps are being taken to right the ship. Bobby would still have to lay people off and move shit around because you have to give the market evidence of improvement, and unfortunately, “cutting the fat” is the first and easiest step.
So you think that if Apple’s revenue dropped from $250 billion to $7 billion, in a perfect non-broken world their stock price shouldn’t change? If that’s not what you think, why? What’s the difference?
No, they aren’t. Having a public company grow at that kind of speed is incredibly rare. If your hot take was even remotely true, stock prices of all companies in the world would be in a permanent death spiral, halving year after year. But somehow that’s not the case.
I think the argument is that capitalism, left to its own devices, inevitably and always ends up in that infinite, rapid, short-term growth mindset that creates the vicious, social-Darwinist mentality we see in late state capitalism.
Whether one agrees or disagrees with that assumption, it’s a fairly standard argument.
To me, the biggest problem is really with the stock market and a lack of ‘skin in the game’. The stock market just doesn’t match human psychology.
The stock market is supposed to price each company ‘correctly’, ie. taking into consideration all future profit. So the company states its revenue expectations, and the stock is priced accordingly. It makes perfect sense that if it doesn’t match expectations, the stock price will go down. What doesn’t make sense is that this then drives the company’s direction, the CEO’s compensation etc. Imagine playing a sports game where someone predicts the final score. During the game, your team suffers a goal. Rather than planning on how to win, you now instead choose to focus on the person predicting the score – trying to convince them that you will eventually win. That’s what playing to the stock market is like, and all the incentives are placed on that. Insert into this the fact that nobody really ‘owns’ the company, and that the top officers really have their own personal motives to worry about which don’t align with the company’s, and you get a hot mess.
Compare this to a company owned by a person or even a family, where the long-term prospects of the company are always considered. It’s a completely different ballgame. Even the private investor market, because you’re not constantly looking at the stock value scoreboard, seems to me a lot healthier than the stock market.
On the flip side, without a stock exchange, wealth stays at the very top, and the average person doesn’t get the fruits of investment. But I don’t know if the damage public stock exchanges do to society is worth it. (Not that I think you can get rid of them – it’s purely a hypothetical).
The executives get paid largely in stocks, so everything they do will be to increase the value of that stock.