The news came as a shock, but it also wasn’t exactly a surprise.
One month ago, Jeff Kaplan announced that he would be leaving Blizzard. His departure ended a 19 year career at Blizzard in which he helped develop two of the most important games ever made — World of Warcraft and Overwatch. A beloved figure at Blizzard, Kaplan’s departure sparked an outpouring of emotion from fans and developers alike.
"He was sincere when he bid the team farewell and let them know how proud he was of everything that we were all able to accomplish together and how confident he was in what a lot of us consider to be one of the greatest development teams in the industry," said Aaron Keller – who succeeded Kaplan as Overwatch 2 director — in an interview with IGN. "It was an emotional moment to hear that from someone who you knew meant it and believed it."
But underneath the emotion of Kaplan’s departure was a more troubling narrative that had been brewing since at least 2018. If you’ve been following Blizzard for any amount of time, it’s hard not to notice the outflow of talent from every part of the business. While Blizzard says its voluntary turnover is significantly under industry average and that departures among developers who have been with the company for longer than 10 years are in fact decreasing, several high-profile departures have contributed to the sense among fans, media, and many within the company that Blizzard is experiencing an exodus.
[poilib element=”quoteBox” parameters=”excerpt=Some%20feel%20Blizzard%20has%20been%20on%20the%20decline%20over%20the%20past%20three%20or%20four%20years%20amid%20layoffs%2C%20budget%20cuts%2C%20and%20a%20lack%20of%20major%20releases.”]
“[Kaplan] was the last person that we would have conversations about, ‘How long is he gonna last?’ Because he's the last big blow,” says a source within Blizzard who agreed to speak at length with IGN about the state of the company (and asked to be kept anonymous for this report). “So to some degree, now that he's gone, I don't even know who else could make that big of a wave. I don't even think you'll hear about anybody else of that magnitude.”
In an effort to understand what’s been happening at Blizzard, I spoke to multiple current and former Blizzard employees, some on the condition of anonymity. I was also able to speak on the record with three veteran Blizzard directors, all of whom have been with the company for more than 10 years now, as well as analysts and investors familiar with the company’s current circumstances. The picture that emerges is complicated. Many of the developers I spoke to are still loyal to what Blizzard represents in their mind, even if they are more mixed on some of the changes to it over the past few years.
But even if they are fond of Blizzard’s history and culture, many are still choosing to leave. Some of the departures are a natural consequence of the burnout that comes with working on the same game for more than a decade, others are because they sense an opportunity to chase their dream project in an industry currently awash in venture capital. And some are because they feel Blizzard has been on the decline over the past three or four years amid layoffs, budget cuts, and a lack of major releases, and that it’s time to move on.
This has left Blizzard at a crossroads, and it’s unclear what this will mean for the beloved publisher as it tries to chart a return to the glory that defined its best years.
The Dry Period
Five years ago this month, Blizzard released Overwatch. It was hailed as a redemption story after the struggles of Project Titan, which had languished in development for years. Keller, who worked on both Titan and Overwatch, remembers the “elevating” feeling the team had as the company celebrated Overwatch’s success. “You almost feel like you're really not broken anymore in a certain sense,” Keller says, laughing. “It's always amazing to ship a project that people love. But to do it right after Titan, I think that made it even more special.”
Blizzard collectively exhaled when Overwatch was released. It was a badly-needed win after a period in which major releases including Diablo 3, StarCraft 2, and Heroes of the Storm all struggled to one degree or another between 2012 and 2016. After struggling so hard for so long to figure out what was “next” after World of Warcraft, Blizzard finally seemed to have an answer.
One source described what followed as “a little renaissance.” With Overwatch becoming the company’s fastest game to reach 25 million registered players, and Hearthstone defining a billion-dollar game category virtually overnight, Blizzard reportedly doubled its number of internal teams from six to around 13 while building up an incubation initiative intended to experiment with new game concepts. The Overwatch League was founded in 2017 and kicked off its inaugural season in 2018. New initiatives were spinning up “left and right,” a source says, with money seemingly no object.
By games industry standards, Blizzard has always led a charmed existence. Its history has encompassed a string of genre-defining hits beginning with Warcraft: Orcs and Humans and continuing on through Diablo, StarCraft, and World of Warcraft. Its success created a unique culture in which employees would routinely stay for years or decades — a rarity in the fast-moving, unpredictable games industry.
In a 2016 documentary, veteran developer Chris Metzen, fresh off the launch of Overwatch, articulated Blizzard’s worldview. “What are we really doing? Are we just selling product for a corporation? I guess that’s a part of it, but we’re artists and craftsmen and technologists and writers and poets and all these other things coming together to build something greater than any of us could have ever achieved on our own. That has always been the story of Blizzard. […] What are we prepared to spend the next five years of our lives on, together?”
[poilib element=”quoteBox” parameters=”excerpt=Blizzard%26%2339%3Bs%20success%20created%20a%20unique%20culture%20in%20which%20employees%20would%20routinely%20stay%20for%20years%20or%20decades%20%E2%80%94%20a%20rarity%20in%20the%20games%20industry.”]
This strong sense of pride informs a lot of the culture at Blizzard, and its development teams have tended to be tight-knit and very stable over the years. Many of its employees are also fans. World of Warcraft director Ion Hazzikostas was a self-described hardcore World of WarCraft guild leader who ran a community site and corresponded with Blizzard developers. Diablo Immortal director Wyatt Cheng grew up playing Lost Vikings, and tells IGN he applied to Blizzard four times in six years before finally being accepted to Blizzard North. Its history gives it a pull equaled by few other companies.
“It was a dream come true when I was able to walk through the gates of Blizzard and turn my hobby into a career, into a vocation,” Hazzikostas says.
It can indeed be a very fun place to work. For holiday parties, Blizzard will rent out Disney California Adventure for an evening for its employees. Walk around the campus, and there are reminders everywhere of Blizzard’s history, from statues of its best-known characters to the commemorative swords and shields issued to employees who spend five and 10 years at the company. When things are going well, working on a Blizzard game can be both challenging and satisfying, with developers constantly pushing one another to meet the company’s high bar for quality. Blizzard veterans in particular are very protective of this culture.
It has done its share to keep Blizzard employees rooted in place for years, making it a comparative bastion of stability in the often turbulent games industry. But events in recent years have eroded that culture, pushing many within Blizzard to begin looking for jobs elsewhere.
By 2018, the “little renaissance” was giving way to the growing understanding that Blizzard was a long way from releasing any new games. Overwatch 2 and Diablo 4 weren’t ready to be announced, and the incubation initiative had yet to bear any fruit. It was this realization that sent Blizzard scrambling when it came time to make its customary round of announcements at BlizzCon 2018. It cobbled together a slate featuring WarCraft 3 Reforged and updates to its established games, and it was left to Cheng to lead BlizzCon with Diablo Immortal, a mobile game that famously prompted one fan to ask, “Is this a joke?”
Looking back on BlizzCon 2018, Cheng says “hindsight is 20/20” when it comes to the decision to open BlizzCon with Diablo Immortal. “[W]e all thought that no one was really making mobile games at the quality that we wanted to see. I think that we had not yet announced Diablo 4. We had not yet announced Diablo 2: Resurrected from our vantage point,” Cheng told IGN.
Diablo Immortal sparked controversy not just because fans were disappointed by the lack of Diablo 4, but because it was developed primarily by NetEase, a Chinese mobile developer, with support from Blizzard. Privately, some within Blizzard refer to it as “the outsourced game.” Cheng argues that his team wants to “elevate standards” on mobile, but concedes that Blizzard didn’t do a good job of communicating that.
“In retrospect, that is not a perspective that was easily seen, nor did we do a good job communicating. It's not the audience's job to take all that in, it's our job to communicate that better and to bring them along with us,” Cheng said. “And we didn't do a good job of that. I think fast-forward three years and people do know about Diablo 2 and it clearly was in development for quite some time. People do see Diablo 2: Resurrected, again, clearly in development for quite some time.” Diablo 2: Resurrected was reportedly set to release in June 2020, but was pushed back for more development time as WarCraft 3: Reforged's development team was dissolved and Vicarious Visions was merged into Blizzard.
Chastened, Blizzard sought to reverse the narrative by going big on BlizzCon 2019 and announcing Diablo 4 and Overwatch 2. Blizzard was indeed able to give its fans reasons to be excited again, lifting spirits within the company in turn, but their release was still years away. While Blizzard hosted a major Overwatch 2 livestream just yesterday, it won’t be out until 2022 at the earliest. Speaking with IGN over the phone, analyst Andrew Uerkwitz, a managing director at the financial services firm Jefferies, speculated that it could be as late as 2023 before Blizzard releases Overwatch 2, possibly to align with the fifth anniversary of the Overwatch League.
Outwardly, Blizzard is still mostly doing fine. World of Warcraft: Shadowlands was a comparatively successful expansion, helping lead to an overall revenue boost of around 7 percent according to its most recent earnings report. But Blizzard also shed another 2 million Monthly Active Users [MAU], which Uerkwitz partly attributes to the decline of Overwatch. “Blizzard’s been going through a pretty long, I think, internal transition, obviously changing over some management across the board and repositioning their IP. We're towards the tail end of that transition, I think, and next year will be the first kind of launch of what the revamped Blizzard will look like. So typically when you're at the tail end of a transition, you're losing a lot of players,” Uerkwitz says, noting that Jefferies isn’t “too concerned” about the MAU drop.
But meanwhile, employees within Blizzard have felt the impact of diminished profit-sharing, a twice annual payout tied to Blizzard’s profit targets and individual employee performance. “Every year they'd be like, ‘Oh, you know, it's just a down time. We're not shipping anything. But like, it'll probably get better next year.’ And I was like, uh … but I can do the math. Like, we were years away from shipping anything [in 2018],” a source within Blizzard says.
Keller acknowledges the large gaps between releases. “I understand that it's hard for players to wait. I get that, and I think it's really important for Overwatch 2 to come out as soon as it can. But when we launch the next installment of our games, people come back to it, and I think the reason why they do is because they know that we're taking the time to make the game as good as it can possibly be,” he says. “You can view it as pressure, but internally our team doesn't view the pressure of making Overwatch 2 so much as how do we bring all these players back to our game, or how do we grow the audience?”
[poilib element=”quoteBox” parameters=”excerpt=%26quot%3BEvery%20year%20they%26%2339%3Bd%20be%20like%2C%20%E2%80%98Oh%2C%20you%20know%2C%20it%26%2339%3Bs%20just%20a%20down%20time.%20We%26%2339%3Bre%20not%20shipping%20anything.%20But%20like%2C%20it%26%2339%3Bll%20probably%20get%20better%20next%20year.%E2%80%99%26quot%3B”]
The incubation project was supposed to help in this regard. Conceived as a sort of safe haven for experimentation on new ideas that could become full-blown games, incubation is described as a “black box” by a separate source within Blizzard. Comparatively little has emerged from the process to this point, though IGN is aware of at least two games that have been canceled. One was a StarCraft FPS, as first reported by Kotaku and corroborated by the sources we spoke to within Blizzard. The other was a more experimental mobile game.
Varying reports, including sources within Blizzard who spoke with IGN, suggest that the StarCraft FPS team was surprised by this decision. Many, including longtime Blizzard designer and director Dustin Browder, subsequently departed to start Moonshot Games under the umbrella of Blizzard co-founder Mike Morhaime’s new venture, Dreamhaven. It’s one of several independent studios now stocked with Blizzard veterans. We reached out to Dreamhaven, but it declined to participate in this story.
Ultimately, Blizzard isn’t the only prestige developer to face multi-year gaps between releases. Many big-budget studios put out at most one tentpole release every couple years. To put it more simply: game development is difficult, and that’s before taking into account the havoc wreaked by COVID, which has hit Blizzard as hard as anyone.
Nevertheless, Blizzard devs are aware that their company makes the least money out of the three parts of Activision Blizzard’s business. For all its success with Hearthstone and Overwatch, Blizzard was never really able to find The Next Big Thing after World of Warcraft, and its next round of major releases could be more than a year away.
The Indie Effect
Not long after Blizzard’s triumphant Overwatch documentary, Chris Metzen resigned. He had been with the company since the early 90s, working on WarCraft II, serving as lead designer on StarCraft, and taking the reins as creative director on Warcraft 3. A couple of months later, he went on The Instance podcast to talk about his reasons for leaving. He said it was genuinely hard to leave, but that the demands of game development had taken their toll on him. "I think during those years I burned out really hard," Metzen said at the time. "I think in my heart, I needed a change in my life. I wanted to slow down, I wanted to just not carry the weight of it all.”
Burnout is common in tech, particularly in games, which is a notorious grind even when not taking into account practices like crunch. At Blizzard, where it’s possible to spend a decade or more working on one game, it’s natural to want a change of scenery. That’s what happened with Cheng, who spent 10 years on Diablo 3 before moving over to Diablo Immortal. “I missed the feeling of being on a smaller project. And I knew Diablo Immortal could not be small forever, but I love being there at the birth of a project and riding out that small team feel for as long as you can. We're not small anymore, but it's a nice cultural thing. I think I just needed a break after 10 years from the big team stuff.”
Metzen remained close to Blizzard, reprising his role as Thrall in WoW’s Battle for Azeroth expansion along with other cameos. He co-founded Warchief Gaming in 2018, a studio dedicated to tabletop role-playing that launched a Kickstarter last month. The Kickstarter was funded in 11 minutes, currently sitting at more than $1 million. We asked Metzen if he wanted to talk about his experiences, but he did not return our email.
More and more Blizzard employees are following in Metzen’s footsteps. Whether because of burnout or because of a general sense that the company is trending in the wrong direction, many longtime employees are moving into the indie space. At least five studios stocked with former Blizzard developers have launched within the past couple of years. They include Second Dinner, which was founded by Ben Brode following his departure in 2018; Frost Giant, a studio made up of ex-StarCraft 2 developers seeking to launch the next great RTS; Lightforge Games, which was opened by former Blizzard and Epic engineer Matt Schembari; Secret Door, led by Chris Sigaty, Alan Dabiri, and Eric Dodds, and the aforementioned Moonshot.
[poilib element=”quoteBox” parameters=”excerpt=Sources%20within%20Blizzard%20say%20that%20the%20departures%20have%20had%20a%20ripple%20effect%20on%20teams%20used%20to%20long-term%20stability.”]
"I feel like I get a going away email every day from people I know. Like, it feels like people are leaving constantly now," a source says. "A lot of my friends have left, you know? And there have been team closures over time."
Blizzard downplays these departures, arguing that a development team is more than just a Ben Brode or a Jeff Kaplan, and of course they’re right in that regard. But sources within Blizzard say that the departures have had a ripple effect on teams used to long-term stability. Aaron Keller talks about how Kaplan was a mentor figure and a friend for him over the course of almost 14 years. “I feel like I've learned so much about game design, about project management, about how to communicate with the team, and how to direct people from him. Not just that but [Kaplan] looks out for everybody, not just on his own team, but even other people at Blizzard. […] I can't really express that gratitude fully in words. It's a terrible loss for me to not be able to work with him anymore.”
In the meantime, the sudden proliferation of independent studios filled with Blizzard veterans has drawn attention from fans and media alike. Like Metzen, many appear to still be close to their former company. The ex-Blizzard devs we spoke to who went independent were reluctant to damage their relationships with their former comrades.
It helps that the games industry is currently awash in venture capital. Within just the last couple years, the number of game-oriented venture funds has grown from around “maybe 10 or 20” to “about 80,” says Ed Fries. Fries is a partner at 1up Ventures, an investment firm that describes itself as “a community of independent game developers.” 1up’s portfolio includes both Frost Giant and Lightforge, among several other studios. Fries attributes the increased interest to the growth of the games industry both before and during the COVID-19 pandemic, and an increased willingness to invest in content developers over technology.
Fries’ recollection is that Frost Giant CEO Tim Morten, a former StarCraft 2 production director, decided to start a new company around the same time that Blizzard put StarCraft 2 in maintenance mode. "Tim and several other of the key people on that franchise decided to leave and start a new company to move forward with sort of the spiritual successor to that game. And my understanding is they really did it with the blessing of the company," Fries says. "In fact, if you look, the day that they announced the studio was actually the same day that Blizzard announced they weren't going to do a sequel. And so I believe that was a coordinated effort between Blizzard and Tim's team to kind of say, you know, yep, these are the guys who are gonna take this forward."
Blizzard responded in a statement, "Tim Morten kept Blizzard leadership informed of his plans to open his own studio and we parted on good terms. We wish him and his team the best, and are looking forward to playing what they create, while we at Blizzard continue thinking about what’s next for StarCraft." The spokesperson also pointed toward a blog post explaining the company's future plans for StarCraft.
[poilib element=”quoteBox” parameters=”excerpt=Blizzard%20developers%20typically%20haven%E2%80%99t%20left%20to%20lead%20big-budget%20games%20%E2%80%94%20they%E2%80%99ve%20gone%20to%20smaller%20studios%2C%20perhaps%20to%20search%20for%20what%20one%20current%20Blizzard%20source%20terms%20%E2%80%9Cthat%20%E2%80%98family%E2%80%99%20feeling%E2%80%9D%20again.”]
Lead designer Kevin Dong is among the developers who departed Blizzard to form Frost Giant. He talks about the differences between his new indie studio and Blizzard, such as the lack of a dedicated social media department. Instead of handing off responsibilities, he does his best to help run Frost Giant’s social media channels while also focusing on his core design duties. “[O]ne benefit of being in a smaller company is that there’s a limited number of people involved in any decision being made, and all of these people are easily reachable. No longer do we have long email chains that involve ten people from five different departments, so decision-making is a lot more streamlined.”
Dong says Frost Giant is currently composed of around 80 percent Blizzard veterans. One challenge is finding experienced RTS developers. “It just so happens that Blizzard has one of the largest concentrations of those in the country, so it follows that we would have a higher percentage of ex-Blizzard employees.”
While Dong says he was aware that support for StarCraft 2 was waning, not the least because his team was getting progressively smaller, he says he wasn’t aware of the October announcement that StarCraft 2 would enter maintenance mode when he departed the company in September 2020. He is complimentary of Blizzard. “I know everyone at Frost Giant struggled with his or her personal decision to leave Blizzard, and at least for me, only a special project with a special team could have pulled me away.”
As with anything, the decision to go independent varies from developer to developer. Plenty leave because their game has been canceled or put into maintenance mode. One common factor seems to be a desire to return to a smaller, more intimate environment. A separate source within Blizzard observed that former Blizzard developers typically haven’t left to lead big-budget games like Assassin’s Creed — they’ve gone to smaller studios, perhaps to search for what one current Blizzard source terms “that ‘family’ feeling” again. While that feeling is purportedly still present at Blizzard, shifting team sizes can cause a developer to go looking for that feeling elsewhere.
Investors, meanwhile, are looking for experienced developers who can quickly start up a successful studio, and Blizzard developers are more available than they used to be, says a source. “I almost think a lot of the things that made it harder to poach Blizzard people stopped. So it's become very easy to poach, and a lot of the senior people can just take people with them. Because it doesn't matter what the actual situation is, people believe in narrative. And when the narrative is like, this place is going downhill, it's really easy to talk people into leaving it.”
The Pressure Grows
In the meantime, Blizzard has been going through a host of internal changes. In 2018, co-founder and CEO Mike Morhaime announced his departure from the company, making way for then-World of Warcraft director J. Allen Brack, who stepped in as the studio’s new president. Ray Gresko, who had been with Blizzard since 2004, was elevated to Chief Development Officer, but departed barely a year into his new job. Co-founder Frank Pearce left Blizzard in 2019. Major leaders like Chris Metzen, Chris Sigaty, and Ben Brode all stepped away in the period between 2016 and 2020.
In late 2018, Blizzard announced that it was spinning down Heroes of the Storm, its erstwhile competitor to League of Legends and Dota 2, moving developers to other projects and canceling its Heroes of the Dorm tournament and the Heroes Global Championship. It was around this time, our source tells us, that Blizzard also became much more conscious about spending. This is corroborated by similar reports from Kotaku. “The company went from, ‘No, don't even think about money. Spend whatever you want,’ to, ‘Oh, shit. We need to cut costs.’ And that happened around the time of [Mike Morhaime] leaving and [J. Allen Brack] taking over.”
Matters didn’t improve in 2019. Activision Blizzard was roiled by more than 800 layoffs in February, with the explanation that “staffing levels on some teams are out of proportion with our current release slate," according to a leaked memo to staff from Brack. Many of those layoffs came from the esports and community sections of the business. Controversy also erupted when a professional Hearthstone player named Blitzchung was punished for speaking out on behalf of Hong Kong on an official stream, the backlash growing in scope until Brack was eventually forced to apologize on stage. Toward the end of the year, Blizzard realized that Warcraft 3 Reforged — which had been hastily announced the year before to cover the gap in its release schedule — was in deep trouble. Developers across multiple teams were pulled in to try and save it, crunching to try and get the remaster at least into a condition where it could be shipped, multiple sources say. The backlash that followed was severe, and the team responsible for its development was reportedly dismantled later that year.
A narrative emerged around this time among fans and media that Activision was clamping down and exerting more and more influence over Blizzard — a narrative that many within Blizzard believe. But Blizzard also continues to cherish what could be called its editorial independence, to the point that even talking about money is actively discouraged in some areas. A firewall of sorts has been constructed around the core game development teams, with every effort being made to protect Blizzard’s internal development culture. When the layoffs hit in 2019, game development escaped relatively unscathed.
[widget path="global/article/imagegallery" parameters="albumSlug=the-blizzard-china-controversy-explained&captions=true"]
The reported firewall around game dev may be one reason that Keller is so vehement in pushing against this narrative when speaking with IGN. “I can't think of one time where Activision has… or sorry, like management, has come in and asked us to change a creative decision about any of our games. They have so much faith and trust that these talented developers that they've hired are making the right choices for their games. They give us free rein to do that.”
The flipside of this wall of protection for core game development is that pressure has fallen more on other parts of Blizzard, particularly the support services, as Activision Blizzard has steadily consolidated the larger business. It was around 2018 that Blizzard’s internal review process was fully revamped, sources say, adopting a stricter, one-size-fits-all approach that put the company on the path toward being beholden to stricter performance curves as Blizzard HR was consolidated into the company at large. Blizzard responded in a statement, "We are constantly exploring ways to better serve the needs of our player community while simultaneously supporting our people. Right now, we’re intensely focused on developing and releasing more games and content and hiring more than 500 developers across announced, and unannounced, projects. In a rapidly changing and competitive industry, this requires a shared commitment and requires us to make decisions that enable us to be effective and adapt while preserving the quality expected of us from our player community."
Esports continue to take the brunt of the impact of Blizzard’s budget cuts and layoffs as the COVID-19 pandemic bites deep into live events. A separate source we spoke with opted to leave in 2020 when Blizzard refused to upgrade them from contract to full-time, realizing that they were apt to be swept up in the next round of layoffs. Sure enough, Blizzard laid off around 50 employees from its esports division in March 2021, citing difficulties from the pandemic.
Despite the attempts to shelter core game development, developers have felt the impact. With less support from Blizzard’s esports and community sections, IGN has heard stories of Blizzard devs having to pick up the slack by helping out with events or writing patch notes. One way or another, everyone has felt the cuts around Blizzard.
[poilib element=”quoteBox” parameters=”excerpt=IGN%20has%20heard%20stories%20of%20Blizzard%20devs%20having%20to%20pick%20up%20the%20slack%20by%20helping%20out%20with%20events%20or%20writing%20patch%20notes.%20One%20way%20or%20another%2C%20everyone%20has%20felt%20the%20impact%20of%20the%20cuts%20around%20Blizzard.”]
Then there’s the schism with Activision’s corporate side, which has left some within Blizzard feeling powerless and out of control of their own destiny. In March, Activision Blizzard’s announced that it was hiring Brian Bulatao as its Chief Administrative Officer. In an internal memo sent to Activision Blizzard employees that was obtained by IGN, Activision CEO Bobby Kotick praised Bulatao for his experience in government and his military service, saying he represented Activision Blizzard’s commitment to hiring veterans. But conversations on Blizzard’s internal Slack channel and elsewhere reveal that Bulatao’s hiring generated considerable controversy, as employees questioned the wisdom of hiring a former Trump administration official once described as a bully.
Some employees were feeling “speechless” and wondering how he represented the values of Activision Blizzard. A few suggested sending a “Hey J” — an internal message system designed to connect employees with president J Allen Brack — to raise their concerns. Blizzard responded to IGN in a statement, "Like every new leader at Activision Blizzard, Brian is continuing to meet with our employees and engage in listening sessions across the organization. He is looking forward to meeting with more Blizzard employees and is invested in them, and all of [Activision Blizzard's] employees’ success."
Ultimately, the furious internal debate carried with it the tacit acknowledgment that Blizzard didn’t have much say over who the company hired to run Corporate Social Responsibility, which is part of Bulatao's portfolio. As the company that makes the least amount of money alongside King and Activision, more than one employee expressed that Blizzard was basically along for the ride.
“Realistically, the way big companies work is ‘if you make them money, you set the culture.’ And Blizzard doesn't make them money. Call of Duty does, and they set the culture,” a source within Blizzard says. “So, if anything, unless Blizzard actually starts delivering more money, I think it will continue to trend in that direction.”
Just Around the Corner
When 2021 began, the mood around Blizzard lifted somewhat. The end of 2020 had been difficult, with Blizzard forced to shift developers from Overwatch 2 in order to get Shadowlands out the door. But despite the last-minute scramble, World of Warcraft’s latest expansion had been successful. Employees were hopeful its success would be reflected in Blizzard’s profit-sharing program, which was due to pay out in March.
When March 5 rolled around, though, Blizzard announced that employees would be receiving about 50 percent of their expected target depending on their performance. In an email to employees obtained by IGN, Brack attributed the number to reduced second-half profits for 2020. Brack promised that better times were ahead, pointing to Diablo 4, Overwatch 2, and additional, unannounced projects as reasons to be optimistic.
“If we deliver on our slate of plans, we expect 2021 and 2022 to be great years for Blizzard,” Brack wrote a month and a half before Kaplan’s departure.
Blizzard responded with the following statement: "We believe in a pay-for-performance philosophy that encourages us to make content that resonates with our players. Like many other compensation programs, Blizzard’s profit-sharing program is directly tied to our business performance — the details have not changed for a number of years. Last year, we had successful releases, but we also heavily invested in our future. We’re looking forward to sharing what we’re working on with players, and ultimately rewarding our teams for their contributions."
A Blizzard spokesperson told IGN that it "recently awarded equity to almost every single employee, adding over $100 million to the Blizzard equity grant pool." A source within Blizzard says that "recently awarded" is a strong term since almost all employees don't know what they're getting yet, but that employees have been told "you are getting something."
Salaries and bonuses have been a sensitive subject at Blizzard of late. In December 2018, Blizzard ended its holiday bonus program, integrating the payouts into salaries instead. Last August, Bloomberg reported that Blizzard employees began sharing salary information, with many reportedly frustrated by what they perceived to be low pay. One source within Blizzard was sanguine about it, saying that there was only so much slack that World of Warcraft and Hearthstone could pick up. Others expressed frustration during conversations in Blizzard’s internal Slack channel and elsewhere.
Add in the steady drumbeat of high-level departures, layoffs, the large gap between major releases, and the opportunity to go independent, and it’s no wonder that many longstanding Blizzard employees are starting to think about what’s next. After all, five years is a long time to be at any company in the modern age, let alone 15 or 20, and outside of the surprise success of WoW Classic, there’s been precious little in the way of wholeheartedly good news for the company of late.
[poilib element=”quoteBox” parameters=”excerpt=%E2%80%9CIt%20feels%20like%20the%20company%20is%20just%20bleeding%20and%20taking%20punches%2C%20and%20realistically%2C%20the%20only%20thing%20that%20is%20gonna%20stop%20that%20is%20shipping%20Diablo%204%20or%20Overwatch%202.%26quot%3B”]
“It feels like the company is just bleeding and taking punches, and realistically, the only thing that is gonna stop that is shipping Diablo 4 or Overwatch 2,” says a Blizzard source. “We talk all the time about like, ‘We really kinda messed up long-term planning, you know? Our release slates and things like that.’ If you look at how long the games take to make, and Diablo 4 and Overwatch are probably shaping up to ship roughly around the same time or in successive years, it is hard to imagine this not happening again to Blizzard.”
For now, at least, better times may indeed be ahead. Analyst Andrew Uerkwitz is bullish on Diablo Immortal, and thinks that Diablo 4 and Overwatch 2 will give Blizzard the success it craves within the next couple years. He goes as far as to argue that Diablo Immortal has the chance to be bigger than Call of Duty Mobile, pointing to its earnings potential in Asia, where games like Diablo tend to be more popular than shooters and Blizzard has an established foothold.
“Most of the top titles in that space were natively built in Asia, either by NetEase or Tencent. And none of them have the IP cachet that Diablo has,” Uerkwitz says of Blizzard’s upcoming free-to-play mobile game, which is still set to go into full release in 2021. “I think Diablo has been a sneaky success on PC for years in Asia, and so I think putting them together with NetEase – with their expertise of this style of game – positions it well to kind of be the leader of that space similar to how [PlayerUnknown’s Battlegrounds] became the leader of the shooter genre on mobile over there.”
Over the past five years, Blizzard has been stuck in a holding pattern as it has juggled setbacks, key departures, and internal reorganization. Jeff Kaplan’s departure was in some ways the culmination of this grinding transition period. The past three years have taken their toll on Blizzard, and it’s unclear what long-term effects Activision’s reorganization will have on its internal culture, or whether it will be able to avoid another dry period like the one it is currently suffering. In the near-term, Blizzard is doubling down on its established characters, hopeful that the likes of Thrall, Tracer, and Lilith (but not Kerrigan) will be enough to carry it forward.
“We are about to turn the corner into a really exciting time,” Ion Hazzikostas says optimistically. “I think Blizzard has long development cycles. The games that we make are not games that are produced and turned around quickly in a year or two. People have seen what's in the works with Diablo 4, with Overwatch 2, and are incredibly excited about both of those games. […] [W]e have other projects that are in the works, and I think, you know, folks across the world will be seeing before too long what we're up to, and I can't wait to share that with them.”
For Blizzard, better times are perpetually just around the corner. It’s just a question of how many existing staff will wait for them.
Kat Bailey is a Senior News Editor at IGN. Got a news tip? Send her a DM on Twitter or Signal.
Additional reporting by Taylor Lyles.