Loading Screen: The Activision Layoffs Laid Bare, Epic + Disney and 2K Says MTX is "Fiction"

Loading Screen: The Activision Layoffs Laid Bare, Epic + Disney and 2K Says MTX is "Fiction"

Today - more details from the Activision Blizzard layoffs have been released, Epic are making moves with Disney and 2K is defending itself from legal action by saying MTX are literally worthless.

Conor Caulfield

More details from the Activision Blizzard layoffs have been released, Epic are making moves with Disney and 2K is defending itself from legal action by saying MTX are literally worthless.

Disney Land Fortnite will be a thing we're all subjected to soon.

Xbox Close Activision Offices - Not Studios

We now know that 899 layoffs from the 1900 from Microsoft will be from Activision Blizzard offices in California.
As a result of Californian law, the layoffs have to be filed in advance, detailing affected locations in that region - which has now been done.

Referring to the body of the report, this is broken down more via studios:
Blizzard: 479
Toys for Bob: 86
Sledgehammer Games: 76
Infinity Ward: 49
Then a further 79 staff in corporate headquarters and 130 employees in publishing.

What has also been confirmed though is that this isn't the only change being mandated by Xbox Corporate.
The SFChronicle has detailed that Toys for Bob, who already were understood to be losing 30/40% of their staff will also be losing their main office.
Remaining staff will instead presumably be redirected to either another Activision office in the interim, or they'll be asked to work remotely.

Obviously, this is particularly resonant because the studio, like most of Activision Blizzard, was part of the Return to Office mandate of the last year or so.
A process of changes which were framed as soft layoffs by many and a great inconvenience to some staff as they had to uproot their lives to manage being back in office.
Now they'll be going back to that position under new management.
Because, despite initial reports, this does not mean that Toys for Bob will be closing.

With the official filing of the layoffs though also comes the official responses.
Remember how the FTC is still fighting to block the merger of Xbox and Activision?
A letter filed by the legal team in that case argues that Microsoft has gone back on their word, explicitly in relation to their operation of Activision Blizzard as a separate company.

Microsoft’s recently-reported plan to eliminate 1,900 jobs in its video game division, including in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Court.
Specifically, Microsoft reportedly has stated that the layoffs were part of an “execution plan” that would reduce “areas of overlap” between Microsoft and Activision,2 which is inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger.

Effectively, Microsoft said that Activision would continue to operate as a semi-independent entity meaning there shouldn't be any overlap between the two companies to remove.
Equally, the fact that these staff have been laid off now weakens Activision Blizzard in a way that means if the FTC orders the deal to be reversed ABK is now in more of a position of risk than it was before the merger.
They're arguing that there should be an injunction placed to stop any further intervention by Microsoft - but it's unclear if that would be granted by a judge.

Of course - from Microsoft's point of view - they're arguing that Activision were planning layoffs already.
Which is an argument when the specifics of those layoffs are presumably on some legally admissible meeting notes or documents somewhere.

Game Delays Announcement

Running up to it's fourth delay from Publisher Gearbox - Homeworld 3 has been delayed following initial reception to it's Steam Next Fest demo.
The game will now release on May 13th, rather than in March, which will give the team more time to work on bugs.

Similarly the strategy title Solium Infernum which we highlighted in our Upcoming Games for February, has now been delayed until February 22nd.
This shifts it back a week from the original date.

Epic (Kingdom) 💕 Disney

As part of Disney's earnings report - they've announced a massive partnership with Epic Games, one to the tune of $1.5Bn.
This will get them an equity stake in Epic Games, as well as a partnership on a singular new project.
From Disney CEO Bob Iger's commentary during the earnings call as caught by Inverse - it's being framed as a metaverse for Disney (but never actually using the words).

“What if we create a gigantic Disney World?” Iger says, noting that Disney’s Spider-Man licensed games have been its biggest gaming success in the past. “A world that could live next to Fortnite and be completely interconnected with it. A world where people can play games that we create, could create their own games, could watch. You could imagine the creation of short form videos, or maybe we may even use the platform to actually distribute some of our content.”

This is basically the same story we've been hearing from many companies.
But they're doing something much more palatable for themselves and for audiences.
Rather than throwing money at some up and coming Web3 style company, they've identified the biggest player in the space (because Fortnite is already a Metaverse, one that's successful) and simply gotten on board with them.
Because why invest in trying your own metaverse when there's one already there?

It's worth noting this is broadly the same plan as Disney have had with games elsewhere. Their Star Wars games are just licensing out the brand, same with Machine Games and Indiana Jones or even the Mickey's Illusion Island game from Diala Studios.
Epic will help Disney build a Lego Fortnite style experience that will be standalone (and presumably make tonnes of money).

What's possibly more relevant to our understanding here is the equity stake - and Disney's existing use of Unreal Engine for production of their media.

Unreal Engine is used to produce assets and content across the Disney portfolio including in the development of video games like Kingdom Hearts 3 and Star Wars Jedi: Survivor; in cinematic editing and animation for film and streaming; and in the creation of more than 15 Disney Parks attractions like Millennium Falcon: Smugglers Run at Star Wars: Galaxy’s Edge.

Disney need Unreal for their production work outside of games.
They already have a tonne of assets produced for Volume - the visual soundstage that literally already uses Unreal Engine to produce the backgrounds for The Mandalorian and more.
Having an equity stake in Epic (a company that is believed to be 40% owned by Tencent) means that Disney now has a seat at the table to help guide future development and changes for the tech.
Even as Epic Games confirm to GI.biz that Tim Sweeney "will continue to maintain control of the board following the close of this transaction".

2K Say In Game Currency is "A Fiction"

Speaking of theme parks though, the idea of in theme park currency is a long standing one - that's where Disney Dollars comes in- they're a better deal that 2K's in game currencies.
Because per 2K's lawyers, those definitely aren't real money. As such, when 2K close the servers for a game - audiences aren't losing anything if they have currency left over.
This is relevant because it's coming as part of a lawsuit brought against 2K and Take Two - one that alleges they are guilty of Civil Theft and Unfair Business Practices.

As captured by Eurogamer:

"VC [virtual currency] is not plaintiff's property," a Take-Two lawyer stated this week, as reported by Game File. "Instead, in-game VC are fictions created by game publishers, subject to the publishers’ terms of service and user agreements."

The basic argument is that if the currency isn't real - then it can't be stolen.
And mostly, that's fine because of how the EULA effectively signs over the users rights to the game in the event that 2K want to end the provision of service.

This is a civil suit - and one only entering it's opening stages - so it's a long way from being settled law around microtransactions.
The lawyers defending this for Take Two don't care about the optics of all this, effectively arguing for the devaluing of the whole concept of MTX.
But maybe users should take note of that attitude going forward.