Activision Blizzard announced staff reduction by 8%. Is it a “Fortnite” effect?

Activision Blizzard, one of the largest video game companies, announced plans to release 8%. employees from nearly 10,000 employed. The company is a victim of the so-called Fortnite effect.

Activision Blizzard, which owns such titles as “Call of Duty”, “World of Warcraft”, “Diablo” or “Overwatch”, is one of several game producers who have recently been struggling with the huge competition of “Fortnite”, a multiplayer game released by Epic Games. In November 2018, the number of registered Fortnite players exceeded 200 million and is constantly growing, taking the recipient base from another producer. This phenomenon is called the Fortnite effect.

Although Activision Blizzard recorded record sales in the fourth quarter of 2018 and throughout the previous year, president Robert Kotick noted that the results did not meet the company’s expectations.

We did not implement the plans to the extent that we expected in 2018, and our current outlook for 2019 falls below what is possible to achieve in the industry. We have not achieved the objectives regarding the reach, involvement and investment of the players we have set ourselves –
Kotick said.

The company expects this year to be temporary and the sale of games will not increase as quickly as expected. The company will have to make significant changes to achieve long-term goals. Reduction of jobs will include support staff and staff dealing with less popular titles.

The same issued Electronic Arts has. After reveling last quater financial resulats, which were much below expectation its stock price decrease more than 13%. This is also a result of “Fortnite” popularity which is still growing. Now Apex Legeds which was released on 4th of February may change this trend.