Microsoft (MSFT) Reports +49% Gaming Revenue Increase YoY, Continues With 1900+ Activision Layoffs

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Microsoft (NASDAQ: MSFT) has just released its Earnings Call for the second quarter of the 2024 fiscal year, with its gaming business garnering $7.1 Billion, a 49% increase in revenue compared with the previous fiscal year’s earnings in the same time frame. Moreover, Microsoft’s Earnings Call reported that gaming has become their third-largest business, passing Windows at $5.3 Billion. This was in the same week that 1900 layoffs (Activision Blizzard Layoffs) were announced in the sector, primarily targeting Xbox Game Studios, Activision Blizzard. In addition, it’s speculated that more layoffs are to follow this initial phase of dismissals.

The merger’s $69 Billion acquisition was completed in October 2023. Moreover, Activision and Microsoft Laid off 83% of their eSports division, with only 12 staff members left on the team. Consequently, Blizzard’s Mike Ybarra, and Allen Adham have resigned to be replaced by former COD executive, Johanna Faries. Secondly, this has led to the cancellation of Blizzard Project Odyssey, an untitled MMO Survival game being developed on Blizzard’s Synapse Engine.

  • Microsoft has laid off 1900 Activision Employees, including most, if not all of Activision’s Esports segment.
  • Microsoft Reported its Gaming Revenue Increased by 49%; nearly $7.1 Billion in their MSFT Earnings Call for the second quarter of 2024.
  • Blizzard President, Mike Ybarra and Blizzard Co-founder Allen Adham have resigned.
  • Blizzard’s Project Odyssey MMO, built on the Synapse Engine, in development for 6 years, has been canceled by Microsoft.
  • Microsoft and Activision have laid off 83% of their Esports Staff with potentially further axing possible in the coming days.
  • Microsoft and Activision announced Esports Layoffs after the team returned from the CDL 2024 Boston Breach Major; only 12 staff members are left in their Esports Division.

1900 Layoffs after the Biggest Quarter in the History of Xbox Game Studios Activision Blizzard

MSFT Earnings Call
Microsoft Activision layoffs
Mike Ybarra Blizzard
Project Odyssey Blizzard Canceled

Xbox content and services revenue has risen by around 61%, with the major contributor being Activision Blizzard revenues. However, even after these earnings, Microsoft laid off about 8% of the workforce with 1900 employees affected. Online, fans of the studios are disappointed in the Microsoft layoffs and are empathizing with the fired employees, especially considering how well Microsoft is generally doing in their fiscal earnings. Xbox CEO Phil Spencer has said that the layoffs were part of a ‘bigger execution plan to reduce areas of overlap’. The net impact of the Activision merger comes to around $2 Billion-plus in revenue.

Mike Ybarra Blizzard President Resigns Former COD Exec Johanna Faries Takes His Place

MSFT Earnings Call
Microsoft Activision layoffs
Mike Ybarra Blizzard
Project Odyssey Blizzard Canceled

Mike Ybarra has chosen to leave Blizzard after overseeing the acquisition with Microsoft. Ybarra has spent over 20 years at Microsoft previously and plans to travel the world post-merger with plans to return to work with ‘hyper-growth’ opportunities and great teams. Replacing him is former Call of Duty executive Johanna Faries who previously worked on NFL. Alongside Ybarra, Blizzard’s Chief Design Officer Allen Adham has also left the company. Allen was one of Blizzard’s co-founders and has been part of Blizzard’s legacy from the start.

Blizzard’s MMO Survival Game Project Odyssey Cancelled by Microsoft

Project Odyssey Blizzard 
Synapse Project Odyssey
Mike Ybarra Blizzard

Project Odyssey which was announced in 2022 has been canceled by Microsoft which was a big Blizzard project. With the announced layoffs that hit most members of Project Odyssey, the game was canceled. Over 100 people worked on the Project, with the game being in development for over six years. The game was set in a new universe and originally pitched by Craig Amai. Unfortunately, it was meant to be a survival game rivaling Rust and Minecraft, however with the Blizzard touch of polish and fewer bugs.

According to Bloomberg, the project was struggling due to technical faults surrounding the engine, as the game was originally being made on Unreal Engine. Still, development shifted towards Synapse, which is Blizzard’s game engine originally meant for mobile games.

While Blizzard staff were hopeful that they would be given more leeway and authority to choose their engine, the project ended up being scrapped as it was ruled that Synapse was not ready. Play testers also revealed that the game originally was enjoyable as a whole and there was actual potential for Blizzard to grasp the survival game market.

83% of Activision Esports Division Laid Off After Return From CDL 2024 Boston Breach Major Event

These firings come just after the staff has finished a major tournament event. Now, only twelve people now left in the Esports division. Microsoft informed the staff about the layoffs just after they returned from the CDL 2024 Boston Breach Major Event. This move has also received a lot of backlash. Apparently, Microsoft waited until the staff completed the event and announced it around the earning calls release.

Members of the staff originally believed that they were safe from the recent layoffs, as they were not listed. Scott Parking, former senior manager of Esports at Activision Blizzard, expressed his disappointment online;

Xbox Game Pass numbers have not been released by Microsoft for a while. The last time was when they announced that it hit 25 million players over 2 years ago. It can be assumed that it is performing well. Why? Nadella praised Starfield’s contribution to its own growth and its solid lineup over the past few months.

Xbox Game Pass’s lineup for this month included launch day access to Palworld. The Pokemon-inspired game has since made waves around the internet. The game has been climbing the charts with its sales and its concurrent player count. We’re putting out comprehensive guides for Palworld. Stay tuned for more salt on EsportsNext!

Zain Raza
Zain Raza
Zain's gaming passion started with the PSP era. He has been a PlayStation fan from the start and loves narrative driven single-player games. He dabbles into all things pop culture.

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