You don’t want to do that either. You think you do, but you don’t.
-J. Allen Brack, BlizzCon 2013
I am pretty sure that J. Allen Brack would be pretty happy just being known as the guy who arrogantly pissed all over, and probably helped delay, the huge money maker that WoW Classic turned out to be.
I am also pretty sure both he and the company wish that statement was worst thing to come out of BlizzCon 2013.
But yesterday saw him step down as President Blizzard… a polite way to say he was the first big sacrifice in the wake of the California Department of Fair Employment and Housing hostile workplace lawsuit. He was joined by the SVP of HR, Jesse Meschuk
Not that he didn’t deserve it. Sure, a lot of the most egregious behavior happened on Morhaime’s watch, but Brack was still in the thick of things, still a leader in the company during that time as well.
Brack was replaced by new Blizzard “co-leaders” Jen Oneal and Mike Ybarra, both of whom have roots outside of Blizzard.
For those of you who like the “Bobby Kotick is cementing his dominion over Blizzard” narrative, it has been noted that Morhaime was CEO of Blizzard, Brack was President of Blizzard when he replaced Morhaime, and Oneal and YBarra are co-leaders now, whatever that means.
And the Brack announcement went out in advance of the Activision Blizzard Q2 2021 financial results announcement, no doubt following the theory that you get bad news out of the way before and hope that you have good news during and after. So was it a good thing that Kotaku pointed out that the company is losing T-Mobile as a sponsor of their Call of Duty and Overwatch esports league before the call as well? And then there was the expected shareholder lawsuit.
Which brings us to the report. You can find the detailed financials, the presentation, and the recording of the call over at the investor relations page.
The presentation opened right up with five actions the company is taking in light of the lawsuit and the protests both from outside and within the company. They are:
- We have asked Jennifer Oneal and Mike Ybarra to assume responsibility for development and operational accountability for Blizzard.
- We will continue to investigate each and every claim and complaint that we receive. When we learn of shortcomings, we will take decisive action. To strengthen our capabilities in this area we will be adding additional staff and resources.
- We will terminate any manager or leader found to have impeded the integrity of our processes for evaluating claims and imposing appropriate consequences.
- We will be adding resources to ensure and enhance our consideration of diverse candidate slates for all open positions.
- We have heard the input from employee and player communities that some of our in-game content is inappropriate. We will be actively reviewing that content and removing it, as appropriate.
Again, this is a change from the stubborn defiance that was the hallmark of the initial response from the company, but is unlikely to be enough in itself to soothe anybody. The employee organizers are still not buying the company’s new tack.
When it came to the numbers, all three pieces of the company saw a decline in revenue from Q1 2021, though that is not unexpected given the roll back in pandemic restrictions we saw midway through the quarter. People went outside and did things, a trend that will no doubt continue into Q3 if the price of airline tickets and rental cars are any indication.
Blizzard alone was down $50 million in revenue when compared to Q1, which was a direct hit to margins.
When it came to singing Blizzard’s praises, the song remained the same, a tale of Azeroth making the money while other franchises languish.
WoW bookings doubled year over year, with much of the credit going to the launch of Burning Crusade Classic. A lot of people bought that pack with the lizard mount.
Hearthstone kept on rolling as well, cranking out yet more expansions.
And while Diablo II Resurrected holds promise for the company, Diablo IV is still on the distant horizon and Diablo Immortal has been pushed back again, this time to the first half of 2022. We could see a four year gap between when it was announced at BlizzCon 2018 with a playable demo and when it finally ships.
Meanwhile over at Massively OP, where they have been keeping score, the running tally of monthly active users for Blizzard continued its downward trend, with the company shedding another million users. We don’t know where they came from or where they went, but they aren’t hanging out in Blizzard games anymore.
After being down in revenue and players in Q2, we have yet to reckon with Q3 and the iceberg that is the California lawsuit. The only thing Blizz has in the near future is Diablo II Resurrected and some likely misguided hope about “stronger engagement” with the Shadowlands expansion. But people were already leaving retail WoW for FFXIV before the shit hit the fan.
I appreciate that Activision Blizzard seems to have finally decided that they need to clean house, though the cut off for responsibility is clearly enforced before you get to the C-level suite, but the company clearly needs to step things up a couple notches or the Q3 results will be a bloodbath.