This of course comes on the heels of the 1900 layoffs that took place back on January 25th.  I do understand that the FTC hasn’t dropped its previous objections to the deal either (the acquisition was completed back in October 2023).

I really don’t want to expend any more energy on this either (because it just tends to suck the life energy out of you).  Generally speaking, this is sort of like the tail end of 2022 when my entire interest in gaming nosedived where I was looking at wrapping up this personal gaming blog (and moving to writing about other things that interest me).  Like everything else, am just going to see where the wind takes things.

The actual group that seems to be targeted is most of Blizzard’s customer service team (arguably one of the best parts of the company).  The article notes that Microsoft plans to outsource this to third parties (oh great) and that this currently has most all of Activision Blizzard (and possibly King) live service games, without any current moderation, in-game game masters, or customer service representatives available (talk about a shitshow in the making).  As speculated, I also believe this will eventually ripple through to community management roles (remember, Microsoft is fully behind AI and will use that to replace a lot of human roles).

Community management has long become an oxymoron because that role has been made to have to wear many different hats where they can barely engage with the community.  I can see Microsoft Gaming moving to AI to parse and collate feedback from the community while utilizing AI to do all the social media posting.  As I noted recently in my thoughts about Palworld, my feelings regarding AI is that it needs to be utilized in moderation; that the human aspect cannot be eliminated completely.  While AI can be a useful tool in this area, I still believe such feedback needs to be reviewed by an actual human because people can relate to the issues that are being conveyed.  An algorithm doesn’t care by comparison and has no concept of priorities except what it is programmed to parse.  I guess we will see.  Anyone advocating for fully adapting to and embracing AI (without considering the ramifications), needs to look in the mirror though because it could be their own personal livelihood and well being that is at play in the future.

Did this occur faster than I expected?  Oh yes.  Normally the corporate inertia is so massive, that it takes a while for leadership to determine what and where they want to reduce.  Reduction in force (RIF) is pretty much a given in these larger M&A’s and is more of a matter of when, not if.  1900 rank and file employees being sacrificial lambs however is a troll though considering Microsoft as a whole (I know that Microsoft Gaming is a division of Microsoft that is expected to operate independently, but it still factors in to the overall balance sheets regardless).  Why?  Their market capitalization as of this writing is THREE TRILLION USD.  That is 3,000,000 million.  Even if you take all of those salaries/wages/benefits packages for every one of those 1900, it would be a rounding error in the greater scheme of things.  How about providing alternative opportunities within the company where their experience and knowledge can be re-utilized?

Again, corporate bean counting executives care only one iota about saving every penny no matter how huge their revenue intake is and how profitable they are.  As a shareholder myself in many companies (including MSFT which I am now looking to divest myself of sooner rather than later), I’ve advocated for a more socially responsible shareholder approach that is not solely about shareholder value at all costs; corporations need to also take care of their rank-and-file employees along with the communities they operate in.  This job slashing by such a well-off company, illustrates again how your livelihood doesn’t matter to the executive “leadership”.

Activision Blizzard executives (well off people who have long been the source the issues and the ones who I believe should be canned first) themselves have been reporting to Matt Booty (who was promoted to president of Game Content and Studio back in October 2023 as part of a reorganization move during the acquisition).  In simple english, Booty oversees all of the different studios (Activision, Blizzard Entertainment, Bethesda, ZeniMax, King, etc).  As it relates to Blizzard Entertainment, this pretty much spells the end of their independent structure (though that significantly eroded anyway once Mike Morhaime stepped down as CEO back in 2018).  While the Irvine campus and associated Blizzard Entertainment brand name will continue to exist, most of the executive roles that were part of it will end up being depreciated.  Whether or not Activision Blizzard itself retains its existing organization structure remains to be seen (I highly doubt it will since there are going to be redundancies there as well).

Blizzard Entertainment’s last remaining co-founder Allen Adham has also decided to depart (which signals the above loss of Blizzard long being largely independent through all of its prior acquisitions; this was something Morhaime negotiated in prior M&A’s).  Additionally, Blizzard Entertainment president Mike Ybarra, is also departing (at least this part, I see as good riddance).  While the brief PR seems to be making it sound like this was a voluntarily move, it contradicts Ybarra’s own words back at BlizzCon where he told people that he (paraphrasing) “wanted to stay at Blizzard for the long haul… that someone would have to drag him out of Blizzard.”

Considering Ybarra’s roots as a Microsoft alumnus (who also worked closely with current Microsoft Gaming head Phil Spencer), there must have been more than enough red flags/feedback regarding his leadership style while Blizzard president for him to get the boot.  I did also state before that the entirety of Blizzard Entertainment’s leadership needed to be overhauled.  Well, I believe that is going to happen and I expect there to be fallout lower in the existing org chart as time goes on.  I do believe the company needs new blood at the designer level after all of the internal scandals/drama.  It’s not like that didn’t have an impact on their franchises though (Diablo IV’s messed up development is a small symbol of that dysfunction).

Another casualty is the survival game (Project Odyssey) that was in development by Blizzard which according to the article (and a later Bloomberg report), was largely in part due to technical issues with the in-house engine (Synapse) they were planning to use.  All of this should serve as warning to anyone considering a career in the gaming industry.  It’s probably one of the least desirable given how the industry is run (along with the unrealistic expectations of the customer base), how it is far more unstable in an already unstable environment of corporate executives expecting more with less.  I don’t expect this to get any better with generative AI (all I see is more rank and file bloodletting as executives look to eek out every penny from every possible avenue).

I noted my brief thoughts on this back in January of 2022; I had previously divested myself of Activision Blizzard (ATVI) in July 2021, and was not enthused that Bobby Kotick would remain in his position IF the deal finally closed (since I also happen to own Microsoft shares).  I personally feel that Kotick should’ve been terminated for cause, but him being kept on by Phil Spencer at Microsoft Gaming until the end of this year to aide in the transition, speaks volumes that this isn’t happening (and he will thus walk away with his huge bonus).  As far as the acquisition amount ($69 billion US), I do believe Microsoft overpaid given the baggage they are also acquiring (but then again, it’s not like Microsoft the total corporation, doesn’t have baggage of its own; though it’s own corporate culture has slowly changed since Nadella became CEO).

No, I do not expect this acquisition to dramatically make over Activision Blizzard and it’s various units (we’re talking about one huge company, acquiring another one; anyone who has been part of these M&A’s know how long it realistically takes to integrate the larger divisions, or even smaller ones where their functions seem duplicative).  Blizzard Entertainment itself is a relatively large subsidiary within Activision Blizzard that will more than likely be largely left alone except the Battle.net unit will likely be pulled into Microsoft Gaming’s equivalent group (so as to better integrate with Xbox online/social functionality).  My preference would be to see Blizzard Entertainment’s “leadership” completely replaced, but know this realistically is not going to happen.

From Microsoft Gaming’s perspective, their primary focus is getting all of the franchise titles they are getting with this acquisition, to work well with the Xbox Game Pass.  I don’t believe the baggage that some of the studios are bringing into the mix, is going to be a top level priority for Microsoft Gaming.  Yes, there will eventually be the reorganizations and shufflings that take place in such acquisitions, but that sort of corporate inertia is really slow going (and is stuff that most usually don’t follow anyway unless they care about corporate responsibility/decency; something which is sadly lacking and is magnified in the gaming industry).

Microsoft made their announcement at E3 on Sunday regarding this exclusive release for the Xbox One in 2020.

We’re partnering with the legendary team at Smilegate to bring CrossFire to console for the first time ever. #XboxE3https://t.co/8Nrh4tQvhb pic.twitter.com/kjkWUE1Xkn

— Xbox E3 (@Xbox) June 9, 2019

Unfortunately, players of some of Smilegate’s other titles like Epic Seven (a turn based mobile RPG) and Lost Ark (a PC MMO-ARPG) somehow managed to began speculating about what this would mean for those respective titles.  Some folks are reading way too much into this announcement though.  CrossFire X will need to compete against other established shooters like Call of Duty for example so Smilegate is going to have continue to invest in the game during its period of exclusivity on the Xbox One in order to make it the best experience as possible.

Lost Ark players who believe this is going to result in some publishing announcement in the west by Microsoft are going to be in for some disappointment; this is pretty specific to Xbox One.  Smilegate’s subsidiary which handles Lost Ark, Smilegate RPG, is marching to their own cadence with regards to publishing agreements.  Mail.ru (My.com) threw money into the pot along with performing the localization (which needs to meet Smilegate RPG’s standards) for the publishing rights.  Unlike other development studios, Smilegate has a tendency to perform the bulk of the non-vocal localization for their titles (their recruitment site occasionally has positions for localization).

Russia is getting an earlier release because a publisher put the $$$ up (as well as performing the localization).  Of course, there aren’t a lot of publishers that are setup to handle this specific region (data center, payment processing, etc).  No western publisher has yet come to a similar form of agreement since it’s going to take way more upfront money to secure the publishing rights for both NA and EU let alone, performing the localization work (more so for EU where there are other languages like German, French, and Italian) if they want to fast track the launch (as opposed to waiting for Smilegate RPG to perform that work first). 

Furthermore, there aren’t a lot of good options (many of the smaller publishers just do not have the cash reserves to vie for the publishing rights).  Smilegate RPG has the option of self-publishing but as I’ve written before, they would need to seriously overhaul Smilegate West (Z8games) and possibly look at re-opening a European subsidiary again (instead of trying to service/support the multitude of non-english speaking European countries from Toronto, Canada).

My point is that Microsoft isn’t going to go deep into publishing a PC MMO-ARPG which they don’t have any sort of development control over so I really don’t see how this particular partnership for CrossFire X, is going to have any sort of major impact on Lost Ark being published to the west any faster.  I suppose time will tell whether or not I am completely wrong on this one.

Polygon followed up that article, looking a bit more in-depth at the various companies that might be on the radar; companies like Electronic Arts, Valve, and PUBG Corp to name a few.

IMHO, EA is a no go not only due to the potential premium, but also the fact that it may not particularly align with Microsoft’s overall core mission when it comes to gaming which is about deeper integration of its Windows 10 platform (PC) and Xbox One.  Like how do you deal with EA franchises which deploy on the competition (PlayStation 4) for example when many of those properties are significant revenue generators?

This is also why I also believe that Valve is a no go (similar price premium) but also how Steam as a platform, will co-exist, supplant, or be integrated into the Xbox experience.  Owning Steam would give Microsoft major control on the exclusivity angle for both PC and Xbox One.  The question is would Microsoft be willing to dump their own storefront (which is abysmal compared to the user experience that Steam provides) and social networking of Xbox Live with Steam instead.

While Microsoft could own the gaming space with an acquisition of Steam, that also comes with considerable baggage (considering that it supports multiple platforms).  How would they handle Mac games for example when it comes to Xbox Live integration?  Initiatives like this do not happen overnight; it may take years to get the integration right.

PUBG the game is a huge wildcard right now due to its popularity (including its Xbox One exclusiveness).  Microsoft may end up preferring to go the route of acquiring studios that have a hit brand/title like when they acquired Bungie for the Halo franchise and their more recent acquisition of Minecraft.  This allows them direct control of those franchises.  Compared to the price tag that will be associated with EA or Valve, PUBG Corporation would come at a lower cost.

PUBG Corp itself happened since this was obviously the thought process when Bluehole were tripping over themselves trying to figure out ways to milk this unexpected success.  They are going to be courting potential suitors and that will include Microsoft.  The biggest issue here though is corporate culture match.  PUBG Corp is essentially a haphazard cobbled together entity with Korean leadership and a mix of Korean designers and European developers.  An acquisition by any company would likely have it operating as an independent subsidiary (sort of like the arrangement that Blizzard Entertainment has with Activision).  But there is still the underlying current and challenges involved when it comes to integrating business operations and having leadership which aren’t at odds with the corporate culture of the parent company.

A Microsft acquisition would represent a huge windfall for parent Bluehole and also be a huge payday for PUBG Corporation’s executives (and to a lesser extent, rank and file employees).  The biggest obstacle I can see is Bluehole past the initial wining and dining phase.  Prior to PUBG, they were a smaller studio that was relatively unknown.  Most of their own acquisitions were small development studios.  Now, they are in uncharted territory were this type of unexpected success can lead to hubris in terms of negotiating terms with a company like Microsoft.

This is of course all speculation at this time since it is probably still at the “feeler” stage.  I would not be surprised though if one of the mandates by Bluehole is for PUBG Corp to find a suitable buyer which would finance development and/or acquisitions that are in a space they are more familiar with (that is MMO designs).

Xbox One backwards compatibility with Xbox 360 games.  Looks like Microsoft is doing the work to get developer/publisher approved games to work with the Xbox 360 emulator they created for the Xbox One.  No extra costs involved for the user.  Sony’s “solution” of streaming older games (via PlayStation Now) is looking awfully lame by comparison.

I do get the technical reasons due to the PS3’s hardware architecture.

Microsoft has been on a roll recently and given Windows 10 (with all the API work they are doing), this is going to benefit the Xbox platform further down the road.  Software has never been Sony’s forte (it seriously shows on the PS4 even now after all the system updates).