Starcraft RIP? Jason Schreier

Jason Schreier
6/06/19
Problem is, I’ve talked to a lot of Blizzard people over the past few months and one of the things I’ve heard quite a bit is that Activision doesn’t see any money in real-time strategy games.

Jason Schreier
6/06/19
I have no idea whether the cancelation is good news or bad news, but it bums me out as a StarCraft fan - what this means is that AFAIK there’s nothing StarCraft-related in development right now. Hopefully the Warcraft 3 remake sells gangbusters and convinces Blizzard that RTS games are worth supporting again.

“You would’ve thought Blizzard was going under and we had no money,” said a former Blizzard staffer, who told me they left the company this year in part because of Activision’s influence. “The way every little thing was being scrutinized from a spend perspective. That’s obviously not the case. But this was the very first time I ever heard, ‘We need to show growth.’ That was just so incredibly disheartening for me.”

It's almost like Activision doesn't care about the long term viability of Blizzard as a company but is mostly concerned with doing the video game equivalent of asset stripping where IPs are exhausted by releasing high margin mobile games that alienate the core fan base and slowly lead to the demise of the company and its brands.

The problem is that Activision has a very shortsighted view of things. They're obsessed with quarter on quarter growth and making sure everything the company does shows a direct profit. But competent business involves thinking past the current quarter to ten years down the line. Blizzard has been a staggeringly successful independent company but has been making bad decision after bad decision since it was acquired by Activision. It doesn't take Nostradamus to project what will become of Blizzard in five years.
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Part of the problem is that claims such as Activisions that RTS games are unprofitable are not based on solid evidence, nor are they unchangeable, natural facts. The reality is that StarCraft I and II have made a ton of money for Blizzard, so not continuing the series because RTS are unprofitable is just stupid.

Capitalists are not necessarily rational or intelligent. Many of them are not particularly knowledge about the industry they are in. As a result, they end up taking a lot of received wisdom on-board and just mimicking other big companies rather than seriously thinking through a long-term growth strategy. Activision has been on the yearly sequels until an IP stops being profitable train for a long time, and I suspect that's what they'll try to do with Overwatch (Blizzard's most marketable franchise).
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Except there's a reason that publishers have systematically been killing game studios for decades now: the research they do is inherently conservative in it's outlook. The focus is on genres with consistent sales over and above doing something more risky that has the potential to be way more profitable.

Consider where innovation and smash hits have come from in the last decade. A lot of them have come from Indie studios. Minecraft has been insanely profitable, PUBG has created a genre of imitators while making tons of money, etc. AAA game publishing has been stagnant and slowly eroding itself through running IP after IP into the ground with annualized releases that are more or less identical to what they were before.

This isn't because there are necessarily a bunch of morons at the top but because they have systemically short sighted incentives (namely, quarterly profit reports). The long term trajectory of this strategy, the one Activision appears to be pursuing with Blizzard, is a long term loss of profitability and probably the closure of the studio.

https://us.forums.blizzard.com/en/wow/t/can-blizzard-buy-back-enough-shares-to-get-rid-of-activision/37510/19
In 2000 Activision created their own holding company “Activision Inc” under which was Activision Publishing (the arm that does the games). Activision is defined in the merger documents as “Activision Inc” (the holding company).

Then in July 2008 Activision Inc merged with Vivendi Games (a division of Vivendi). The new company was named Activision Blizzard to reflect “the significant brand recognition, employee headcount and profit contribution that Blizzard will make to the combined organization 5”

On July 25th 2013 Activision Blizzard announced they were buying back 429 million and million ASAC II LP, an investment vehicle led by Activision Blizzard CEO Bobby Kotick and Co-Chairman Brian Kelly, to which they have personally committed $100 million combined, separately will purchase approximately 172 million shares.

Most notably that investment group has since sold off a majority of it’s shares.

Source Jason Schreier:
https://kotaku.com/the-past-present-and-future-of-diablo-1830593195
Activision merged with the publisher Vivendi (at the time, Blizzard’s holding company) to become Activision Blizzard in 2008, but over the past decade Blizzard has prided itself in remaining a separate entity. With its own management structure and its own campus in Irvine, California, Blizzard has always stood out from Activision’s other divisions and subsidiaries. (Activision HQ is based about an hour northwest, in Santa Monica.) Rather than sticking to strict production cycles that result in, say, annual Call of Duty games for Activision, Blizzard has traditionally given its developers as much time as possible. That’s one of the reasons the company has been renowned for making some of the greatest games in the world.

This year, however, Blizzard employees say that one of the biggest ongoing conversations has been cutting costs. To fans, and even to some people who work or have worked at Blizzard, there’s a concern that something deep within the company’s culture may be changing.