You heard the news. Activision fires 800 people despite best year ever in terms of revenue. Arena.net, the operator of Guildwars, seems to get large layoffs. EA will fire a lot of people from their Australian studio (For Americans: that's near the Hobbit place, not the one in the Alps).
Longtime readers of my blog know why this happens now. Others can read my 6-year-old entries here:
https://teut.blogspot.com/2012/11/transition-years.html
https://teut.blogspot.com/2014/03/transition-years.html
Let's take the Activision case. Why fire 800 people when you had a record year? The reason is, you don't fire people due to the current year's results, but what you see in your forecast of the next. If you look at Activision's portfolio for 2019/2020 there is a large gap of original titles. Even Blizzard, part of Activision, said there is no new Blizzard game coming for a while. So the next one or two years will look bleak for Activision. That's why you optimize your company and fire the bottom 10%.
I am not defending this, I am just explaining. The one thing you can blame Activision is that they knew this is coming, its poor planning (and letting Bungie leave, wtf?).
Activision needs to invest their best teams into the next console generation. As the current one will drop in revenue in terms of software and the new one won't do much at first that gap is what we call transition years. EA is very experienced in this and already cut off workforce last year and will continue this year. If you google back into 2012 you will notice the same happened.
This transition year might not be as bad as the previous ones though as the rumored backward compatibility of the next generation, the Switch and the mobile market might buffer some of the previous revenue losses.
