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Old 02-29-2012, 05:52 PM   #21
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Has nothing to do with free to play. WoW is built on gameplay that was archaic when it was released, and is simply no longer palatable for many. It's compounded by the complete destruction of their own lore, which up until recently was one of the biggest reasons I played. The Old Republic is going to hit this wall sooner than later as well; gameplay is dated, and only the "single player" story and lore keeps me interested.
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Old 02-29-2012, 06:13 PM   #22
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You have to understand the way Activision looks at this. The board of Activision is under pressure to have constant increase in their revenue and profitability. WOW might be making huge money, but maybe the revenue is flat or trending downward. Many times mgmt will cut staff simply to try to offset flat or downward trending revenues. It is not about how great you are doing, but about how you will do as compared to last qtr or year. They consider anything but an increase to be negative.

Case in point... My wife has worked for Merrill Lynch for a long time. Back in the 90s they were making record profit every qtr (over a billion in profit per qtr), all of a sudden, they had 2 qtrs that did not set new records. Profits were still very high (like 800 or 900 million for the qtr), but not increasing. The result: they laid off something like 50,000 people worldwide.

This is just how large corporations operate.

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Old 02-29-2012, 06:25 PM   #23
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When WoW finally goes down, will probably be good for the industry.
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Old 02-29-2012, 07:15 PM   #24
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You have to understand the way Activision looks at this. The board of Activision is under pressure to have constant increase in their revenue and profitability. WOW might be making huge money, but maybe the revenue is flat or trending downward. Many times mgmt will cut staff simply to try to offset flat or downward trending revenues. It is not about how great you are doing, but about how you will do as compared to last qtr or year. They consider anything but an increase to be negative.

Case in point... My wife has worked for Merrill Lynch for a long time. Back in the 90s they were making record profit every qtr (over a billion in profit per qtr), all of a sudden, they had 2 qtrs that did not set new records. Profits were still very high (like 800 or 900 million for the qtr), but not increasing. The result: they laid off something like 50,000 people worldwide.

This is just how large corporations operate.

Joe
You hit the nail on the head. Large companies need to see upward growth, even the private company I work with. If the arrow is not going up and stagnates, thats when they start cost-cutting. Pretty much how large companies operate and Blizzard sits at that big boy table now so its par for the course.
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Old 02-29-2012, 07:35 PM   #25
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Speaking of which....http://www.amazon.com/Star-Wars-Old-...6487436&sr=8-5
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Old 02-29-2012, 08:27 PM   #26
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You hit the nail on the head. Large companies need to see upward growth, even the private company I work with. If the arrow is not going up and stagnates, thats when they start cost-cutting. Pretty much how large companies operate and Blizzard sits at that big boy table now so its par for the course.
You guys are missing the bigger picture though.

It's not like cutting employees is the first step if you want to show more profit or something. Modern accounting allows for all sorts of ways to play with your end profitability.

Showing profits isn't actually as important as showing smooth profits year-to-year. A chaotic profit&loss history is more scary to investors than even changes over time.

And even changes over time are actually easier to create by reigning in profits and making them look like not-profits for the year, then shifting profitability into later years when you need it, thus smoothing out profitability. Lots of these schemes involve repatriating profits when needed, taking charges on highly-profitable years, manipulating LIFO and FIFO, etc., etc., etc.

A good accountant can make a profitable year look like a year you took a loss in and vice versa, depending on what the execs decide they need. And the larger the company the easier it is to make these sorts of decisions.

So, if you ask me, knowing that firing actual employees is one of the very last things you would consider when you're low on net income, because employees are how you make money, either ATVI has been manipulating past years' financials to make themselves look more profitable than they really were and now it's gotten really bad such that they've had to take the drastic step of firing hundreds of employees,

...or, more likely, the people fired weren't productive people. Not games programmers or something. And thus, expendable now that the company is feeling the squeeze. Or maybe they're outsourcing something like tech support, or getting ready to buy a company that replaces an entire division. We don't really know enough.
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Old 02-29-2012, 08:52 PM   #27
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Wow...you are either naive or the ultimate company man...sheeesh

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You guys are missing the bigger picture though.

It's not like cutting employees is the first step if you want to show more profit or something. Modern accounting allows for all sorts of ways to play with your end profitability.

Showing profits isn't actually as important as showing smooth profits year-to-year. A chaotic profit&loss history is more scary to investors than even changes over time.

And even changes over time are actually easier to create by reigning in profits and making them look like not-profits for the year, then shifting profitability into later years when you need it, thus smoothing out profitability. Lots of these schemes involve repatriating profits when needed, taking charges on highly-profitable years, manipulating LIFO and FIFO, etc., etc., etc.

A good accountant can make a profitable year look like a year you took a loss in and vice versa, depending on what the execs decide they need. And the larger the company the easier it is to make these sorts of decisions.

So, if you ask me, knowing that firing actual employees is one of the very last things you would consider when you're low on net income, because employees are how you make money, either ATVI has been manipulating past years' financials to make themselves look more profitable than they really were and now it's gotten really bad such that they've had to take the drastic step of firing hundreds of employees,

...or, more likely, the people fired weren't productive people. Not games programmers or something. And thus, expendable now that the company is feeling the squeeze. Or maybe they're outsourcing something like tech support, or getting ready to buy a company that replaces an entire division. We don't really know enough.
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Old 02-29-2012, 09:15 PM   #28
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I enjoy how everyone on the internet is always an expert on an issue. It's so fun to see the leading minds in a field argue about why things are done a certain way or how they should have been done.

oh, and for those of you who happen not to be experts in sarcasm, now you are. that was a single example. see how easy it is to become an expert?
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Old 02-29-2012, 11:00 PM   #29
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First, I believe it was an Analyst that suggested declining WoW subscriptions was the cause; this was not officially confirmed.

Second: there are a lot of other reasons in game development that you'd cut staff as a cost cutting step or as an augment to a cost cutting strategy. As was mentioned the employees could have been redundent like (unfortunately) QA tends to be after a big product ships or during a product draught, or the Art team as more and more art is outsourced to Asia or Eastern Europe.

That said, 600 people seems like it is *a lot*. I am betting with that many positions cut it impacted people in just about every discipline though, in general, programmers tend to be a protected species (hear that kids? If you want to succeed in Game Development get your computer science degree).
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Old 02-29-2012, 11:08 PM   #30
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Wow...you are either naive or the ultimate company man...sheeesh
Not really. I'm just talking about why a company might do what they've done, and how an exec looks at profitability and how it can be manipulated. I made no value judgments as to whether I think that's a good state of affairs or not, so you can't possibly call me a 'company man.' I'm not apologizing for Blizzard or ATVI in the slightest.
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Old 02-29-2012, 11:34 PM   #31
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Blizzard laying off 600

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The company noted that 10 percent of its staff cuts--or about 60 people--were actively involved in game development...

Blizzard was quick to point out that the World of Warcraft development team will not be impacted by the staff reductions.

"Constant evaluation of teams and processes is necessary for the long-term health of any business," said Blizzard CEO Mike Morhaime. "Over the last several years, we've grown our organization tremendously and made large investments in our infrastructure in order to better serve our global community. However, as Blizzard and the industry have evolved we've also had to make some difficult decisions in order to address the changing needs of our company."

Blizzard went on to note that its development and publishing schedule has not been impacted by the staff cuts. Currently, the company expects to announce a release date for Diablo III in the near future, indicating that development on the game is nearing completion. The company is also at work on the WOW expansion Mists of Pandaria, Blizzard DOTA, and Starcraft II: Heart of the Swarm.

At last month's DICE Summit, Blizzard EVP of product development Frank Pearce indicated that the company's global workforce stood at 4,700 employees.
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Old 02-29-2012, 11:38 PM   #32
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Wow..nice way to backtrack from the cliched corporate-speak from before... BTW saying "if you ask me" shows you are given your opinion and "more likely, the people fired weren't productive people" shows bias...so a whopping 600 people suddenly were not "productive"? Surely you are basing this from reading their prior performance reviews

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Not really. I'm just talking about why a company might do what they've done, and how an exec looks at profitability and how it can be manipulated. I made no value judgments as to whether I think that's a good state of affairs or not, so you can't possibly call me a 'company man.' I'm not apologizing for Blizzard or ATVI in the slightest.
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Old 02-29-2012, 11:49 PM   #33
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Wow..nice way to backtrack from the cliched corporate-speak from before... BTW saying "if you ask me" shows you are given your opinion and "more likely, the people fired weren't productive people" shows bias...so a whopping 600 people suddenly were not "productive"? Surely you are basing this from reading their prior performance reviews
The 'if you ask me portion' attempted to give rationale for why it might have happened. That's still not a values question anymore than me explaining why the Challenger may have exploded would tell you anything about whether I support NASA.

Calling them 'unproductive' certainly is a reach though. If I can expand, it would be more correct to call them marginally productive, in the sense that each employee you add decreases your productive potential, to the point that you aren't seeing large gains by adding more employees on a single project.

In the later press report, we learn that Blizzard has 'grown tremendously' in recent years, and if they've decided to level off hiring, it's possible that people hired for a planned project that got canned could have been 86'd, as 600 seems like a lot, nearly 12% of their workforce! That requires an above-average explanation.

So on the one hand, I rejected the idea that Blizzard fired people simply to appear more profitable (my first post), based on my understanding of executive-level accounting and ATVI's profitability overall. And later offered an inductive explanation, but there are many such explanations possible. A cancelled project could be a very good explanation.

All we know is, no one on the WoW team got fired, some 60 people on the Diablo team did get fired. What does that tell us. Who on the Diablo team is even fireable? Game testers? Pre-production people? Hard to say.
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Old 03-01-2012, 12:50 AM   #34
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According to the reuters article, WoW lost 700K subs in the 3rd quarter and subs "steadily decline in recent quarters". Thus it is possible that management may have been overly optimistic with projected subs and over hired in the past. I think its safer to reason that. SWOTOR may have taken some of WoW subs. Activ has a reputation of slashing jobs. Recall how they cut hundreds of jobs about a year or 2 ago with neversoft and bizarre creations. BTW I wouldn't say FIFO, LIFO, etc executive-level accounting, that is basic stuff.
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Old 03-01-2012, 12:51 AM   #35
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It seems to be a very unjustifiable decision considering the success of their business, their aesthetic in game item RMT monopoly and the status of their current subscribers. It becomes downright boggling when you think of the cuts being specially in customer service/QA, with a wow Xpac, Diablo 3, Starcraft Xpacs and other IPs coming out soon.
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Old 03-01-2012, 12:55 AM   #36
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Why do any of you care? And why do any of you care enough to get all sandy vagina'd enough to turn all hippie? Why make these people out to be victims. They can go start a business or get another job.

If i get fired from my mid card job at blizzard and i end up homeless, im doing it wrong and using a job i stupidly though was always going to be there as an excuse to be a lazy asshole.

Hey! Screw you guys!
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Old 03-01-2012, 01:11 AM   #37
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According to the reuters article, WoW lost 700K subs in the 3rd quarter and subs "steadily decline in recent quarters".
Is that net, or is that total losses ignoring new subs. I assume the former?

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Thus it is possible that management may have been overly optimistic with projected subs and over hired in the past.
A reasonable assumption.

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BTW I wouldn't say FIFO, LIFO, etc executive-level accounting, that is basic stuff.
I assure you they are important exec-level decisions. Actually implementing them are basic accounting level, sure, but they can be used to manipulate yearly profitability on a mass scale.

Let's say you're selling steel. You buy at X price. You've got three years of stock. The stuff you bought on year 1 is much cheaper than the stuff you bought on year 3. If you want to bring profits down, you can go LIFO and show much lower profits, because you're costing against much higher stock. If you want to artificially inflate profits, you can switch to FIFO and start calculating profits against the year 1 stock which will give you a far higher profitability number.

In essence, you've been overpurchasing stock in order to give you the ability to manipulate your profitability figures.

This sort of thing is just the tip of the iceberg and goes on all the time. The next step is deciding when you want to write off expenses and the like.
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Old 03-01-2012, 02:12 AM   #38
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You have to understand the way Activision looks at this. The board of Activision is under pressure to have constant increase in their revenue and profitability. WOW might be making huge money, but maybe the revenue is flat or trending downward. Many times mgmt will cut staff simply to try to offset flat or downward trending revenues. It is not about how great you are doing, but about how you will do as compared to last qtr or year. They consider anything but an increase to be negative.
You are absolutely right. And this ruins everything imo. The people, the product...
For one, there's only so much money to make with anything. If it runs well, be happy - but no, as you say there has to be a steady increase. There was a time this was called greed. Now it's being profitable and growing.
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Old 03-01-2012, 02:38 AM   #39
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No development roles have been cut. Apparently its all support staff, sounds like they are trimming the fat and cutting back on some luxuries.
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Old 03-01-2012, 05:15 AM   #40
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No development roles have been cut. Apparently its all support staff, sounds like they are trimming the fat and cutting back on some luxuries.
60 devs got the boot in this "fat trimming" if the leaked numbers are accurate.

At the end of the day, it doesn't matter. This kind of behavior is why the free market is under such fire. The idea that profit is the goal has completely degenerated into, bottom line for the top brass. So they fuck the staff and customers that got it for them, if it wavers in the slightest or if they can find a path to more profit by slicing off heads all while dipping in quality and charging more. It's sick and should be criminal, they flying in the face of capitalism, because we are letting them. If you have to cut staff to save your company, that's another story but what's the last time that has happened?

WoW lost nearly 2 million subscribers because Cata sucked balls. The lead developer, Greg Street is a complete idioit and I'm fairly certain he was not one of the 60 to get fired; a crying shame and I have a candle lit hoping he did, or is killed by wolves in the near future. Those 600 people are just sacrifical lambs, at the feet of idioits and do nothings.
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