Activision Cuts 600 Jobs; Stock Drops

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To misappropriate gamer jargon, Activision Blizzard (NASDAQ:ATVI) just nerfed its job numbers.

According to Reuters, Activision’s Blizzard division, responsible for the blockbuster World of Warcraft, recently announced it would be cutting 600 jobs this quarter.

World of Warcraft, the most profitable online game to date, has been a cash cow for ATVI during the past seven years — and at its peak, it drew over 11 million paid subscribers.

However, subscription numbers have been dwindling in the past two quarters, and its player base seems to be quickly falling away. While World of Warcraft provided the company with unprecedented revenue and publicity, its old-hat status in the video game world and the introduction of an increasingly popular contender in the online gaming ring from Electronic Arts (NASDAQ:EA) seem to point toward the twilight of Activision Blizzard’s most profitable title. World of Warcraft lost 700,000 subscribers over the third quarter of last year, and its player base dropped further from 10.3 million to 10.2 million by the close of the year.

Further bolstering signs that Activision’s most popular title is quickly flagging in revenue value, analysts predict that the overwhelming amount of cuts were to the World of Warcraft customer service department. However, Activision asserts that none of the cuts were made to its design and development departments.

Activision’s shares dropped about 2.5% by midday Wednesday to around $11.65, their lowest trading point year-to-date.

Adam Patterson is Assistant Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2012/03/activision-cuts-600-jobs-stock-drops/.

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