Yesterday’s news that a number of big names were laid off at Xbox rattled the gaming industry and there’s more reverberations today. As most folks are still sifting through the fall out of these layoffs more information is coming the surface to help understand 650 job losses and what they imply for Xbox moving on.
At the time, Xbox head Phil Spencer was quick to let loose that the layoffs consisted mostly of “support positions” and wouldn’t actually impact game development or studio operations. However, an update showed a slightly different tale and especially for one of the biggest franchises in the gaming industry, Call of Duty: Warzone Mobile.
Big Cull for Call of Duty Warzone Mobile
Game File reports sourcing from the team responsible for Call of Duty: Warzone Mobile — and a source with some game development group – in which it was that crew that had been hit particularly hard by layoffs. The setback followed an underwhelming performance of the mobile game relative to prelaunch expectations.
For a lot of people, the revelation might be a little shocking when you consider that the game released to good critical and player reception with strong review scores across multiple platforms. No it wasn’t, and not in the way Activision Blizzard wanted. This led to the obvious move by Microsoft in shrinking the team, which was probably a cost reduction measure considering their increasingly greater financial stress.
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The Wider Context: Costs & Goals
The layoffs of the Warzone Mobile team – while far from reassuring for anyone already working on Microsoft’s Android conversion tool alongside full Xbox Live feature access – also serve as an uncomfortable reminder of how tricky the mobile gaming market remains — a fact that Microsoft is learning painfully every day.
That said, as big of a franchise as Call of Duty may be, it remains to be seen how well the game can do on mobile. Although it was met with critical acclaim, that forced Microsoft to scale back the team and “manage costs” as it wasn’t performed on par with the lofty expectations set by Activision Blizzard.
It is one more sign of a long-term trend in the gaming industry, where ever-increasing development expenses are causing companies to second-guess many of the strategies they relied on over previous console generations. Microsoft of course has its own pressure to make good on one of the most transformative game deals ever, but right now Xbox needs a win, and it’s not been doing so great lately.
A Dark Future Ahead for Mobile Gaming?
There is an irony here that you can taste. Mobile gaming is a huge market and with its massive base of players, it has been considered as a sure money earner for Activision Blizzard alongside Call of Duty being one of the company’s biggest revenue generator. However, the downsizing of the team shows how even top-tier brands may struggle in today’s treacherous mobile market.
It is also a reminder that the mobile market, with it unlimited possibles, is not quite yet an apparent sure thing. Although mobile games routinely rack up millions of downloads, more consistent engagement and profitability is a tougher nut to crack, especially if it means squaring off against other successful franchises.
Back to Xbox’s future with
While this might seem all in good faith, the series of layoffs, especially at Call of Duty: Warzone Mobile raises issues as to what locales Xbox is going long term. Microsoft has a lot of faith in future releases to beef up its standing, especially with Xbox Game Pass, as it continues counting on Call of Duty being at least part-time exclusive for the time being. Still, there is no guarantee that those upcoming releases will be enough to recover from Xbox’s recent woes.
In a statement after the layoffs, Phil Spencer said they were about “aligning our post-acquisition team structure with two areas we believe are critical to development gaming at scale: analytics, focus on production efficiency and quality; and growth management, so that as new technologies cross through the early stages of incubation into mainstream adoption, needs line up with plans.
” However, as noted by many critics the immediate future looks pretty grim for Xbox. The gaming division has been struggling with not living up to player demands due to multiple delays, disappointing titles and now, orders for broad layoffs.
The Union’s Response
The gaming industry has generated backlash from labor organizations in response to these layoffs. The Blizzard Workers Union was quick to offer its perspective on the move, and criticized that Xbox laid off so many employees. These union heads fretted about the trajectory of the industry, arguing that more studios and developers needed to unite in order to stop “bleeding” in moving forward.
In recent years there have been mass layoffs — 800 last year at Telltale alone, for example — which helped spur efforts to unionize within the industry as well as raised concerns from employees that their positions would be made redundant. The push for unions is picking up, particularly as game companies find it harder to marry the costs of blockbuster titles with the stateside toll of developing them.
Aftermath of the Activision Blizzard merger
The Activision Blizzard merger was massive for Xbox, giving the company a boatload of new IP and great developers. Subsequent to the acquisition, however, apparently not. With the announcement, Microsoft eliminated 2500 jobs in total from its gaming division, causing some to wonder whether this merger has actually achieved the benefits expected.
These Call of Duty: Warzone Mobile layoffs don’t instill much confidence either. Even though the franchise is still a powerhouse in the gaming industry, its mobile tax seems to be having a hard time of matching up to those massive expectations set by Microsoft and Activision Blizzard. If this simply leads to further chopping and changing down the line, then something deeper is wrong with Xbox’s strategy.
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After Call of Duty: Warzone Mobile, what?
What this may mean regarding the future of Call of Duty: Warzone Mobile, is not exactly clear but it sounds like we will have to continue waiting for a mobile version of Warzone if we do hear news on it at all. But it is a sign that Microsoft is closely following the performance of the game and adjusting things if they need tending to.
How future Mobile game updates or expansions will be affected by this scaling back, remains to be seen. Those who love the game will no doubt be keeping a close eye on this, since any changes to how a live service game is designed can have long-lasting impact on its ability to grow.
Keeping a Close Eye on the Vision of Gaming Industry
This is anything but over. With the layoffs finally in the rearview mirror, now’s the time to bear down and focus on how Microsoft continues to expand its sprawling game empire. One of the closing chapters in a tale related to higher development costs, shifting market conditions, and the pressure that surrounds big hits being expected surrendered for The Call of Duty: Warzone Mobile team.
It also leaves a big question mark as to whether Xbox can survive long-term (though it’s hardly the first time we’ve asked it), so these job cuts may just be the beginning of some more serious changes down the road. “This is something we are going to have to keep a very close eye on moving forward,” an industry insider said.