People Are Buying Fewer Overwatch Loot Boxes And Hearthstone Packs

While Blizzard employees and staffers began learning of their fate, investors were also getting an update from Activision Blizzard management about the company's outlook for the next year. Part of that warranted an explanation into what Activision expects will be a downturn in revenue over the coming year, and what is affecting the Blizzard side of the business in particular.

In a Q&A with investors, Activision president and chief operating officer Coddy Johnson explained that 2019 was expected to be a softer year for the combined group. A key factor in this was partially due to Blizzard having "no major frontline release" in 2019, and the year also being a "transition year, where we have less new major content to release than we should".

Activision Blizzard Lays Off Hundreds Of Employees

Publisher Activision Blizzard has begun its long-rumoured layoff process, informing employees this afternoon that it will be cutting staff. On an earnings call this morning, the company said that it would be eliminating 8% of its staff. In 2018, Activision Blizzard had roughly 9,600 employees, meaning nearly 800 people are now out of work.

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Johnson went on to explain that while Overwatch and Hearthstone had stable player bases, those players had stopped spending as much money on microtransactions:

"Blizzard had 35 million monthly active users in the quarter, as Overwatch and Hearthstone saw sequential stability, and World of Warcraft saw expected declines post the expansion release this summer," he said. "On the other hand, the relatively consistent monthly active user trends were not matched by in-game net bookings, which continue to soften."

"In particular, Overwatch and Hearthstone both experienced sequential declines in net bookings from players making in-game purchases."

The executive stressed multiple times over the course of the earnings call that their major goals was to improve the cadence of in-game content and new releases, although for this year development on new titles would primarily be concentrated in mobile development.

Activision was also asked whether they would reconsider the premium purchase model for games like Overwatch would be considered given EA's recent launch of Apex Legends and the ongoing success of Fornite. Johnson responded by saying that games need to be paired with appropriate business models for the game, the community for that game, and the platform in question.

He did, however, say the company needed to "move more quickly" to deliver content and "to be able to take advantage of new business models". "Obviously the most proven platform is mobile, so as we bring Activision and Blizzard IP into the mobile space, you will see us move to more free-to-play models."


Comments

    I feel ill after reading that. Activision is devoid of soul.

      Its not that they are devoid of soul as such. They just worship at the alter of money, that's all. They care not for anything but the money. Always the Money.

    I blame all the gamers not spending money for the layoffs

    Last edited 13/02/19 1:54 pm

    It's good that people are buying less loot boxes but I don't think this is the right reaction. Leaning even more into microtransactions is obviously a terrible move for consumers, but I don't even think it's a good idea from a business perspective.

    "Less people are buying our loot boxes so let's shift our business model to be even more dependent on loot boxes to generate most of the revenue." BRILLIANT!

    People buy Overwatch loot boxes? Why? It's so easy to earn them just from playing.

      Its the 2-5% of players that are whales or suffer the fear of nussing out, but with a lot of Overwatch streamers jumping to Fortnite... the biggest purchasing factor in loot boxes "Unboxing Streams/Videos" resulted in a huge downturn.

      Some people value their time over money so are happy to drop a few bucks getting cosmetics faster. Its not in my nature to do that, but I can see why others would want to fast track getting them. People can spend their disposable income however they want.

      This is where I get torn on the whole lootbox issue personally. Not everyone that buys lootboxes had a gambling problem. The vast majority don't and its purely a time versus cost decision.

        So totally remove the gambling aspect and just let people buy the exact cosmetics they want with small amounts of real money.

        I agree that not everyone who buys lootboxes has a gambling problem, but those people are still getting a bad deal, and combined with the fact that it DOES lead to compulsive gambling style behavior in some (including children), I still find them inexcusable as a business model for games.

          I don't think that necessarily helps either. Once its a paid option like that, theres no reason to have the free option at all, so why include it? Then the only avenue to get these cosmetics costs money.

          That's pretty much how Guild Wars 2 operates by the way. Everything in the store is bought with gems. The free options are just so slow that they really aren't an option. So, you can do that, and be able to get a cosmetic maybe once a month, or buy them.

          That's not the rate a game like Overwatch or Destiny 2 doles out the free versions. So how is the direct purchase version better? That's the model people seem to be asking for.

          This is why I'm torn on this. Not about the gambling side, I fully agree something is needed. But so far I just cant see the solutions being suggested as solving the issue. At best it pushes it to somewhere else. Most times it ends up hurting more gamers, because I expect they'd no longer get the free option. And hence encourages MORE spending.

            At least with GW2 if you grind up regular currency in the game, you can then buy the gems with it.

              Easier said than done though. I'm not hardcore, but I do log in most days. Generally I'm making 5 gold or so just messing about. But you need something like 150 to get 400 gems. Every time I've been up around that point theres been something more relevant to spend the gold on. Typically tradeskill stuff though, and making ascended gear.

              There are easy ways to make money, but by the time you're there you don't need the gems anyway. Most people aren't going to have access to that though, so need to look at buying gems, or waiting a month to have enough spare gold to buy them. Or longer.

              I don't think I've ever really had a spare 150 gold to just buy gems.

              But yes, there are free ways. Which there also are with lootboxes in most games. And you get those lootboxes waaaaay faster than you do gems in GW2. A lootbox every 2-3 hours in Destiny 2 versus 400 gems maybe once a week in GW2 if you grind good. When the products you want are 1500-2000 gems, that's a few weeks work for one purchase.

              Which pushes you to the store. I don't think that's any better a solution to how lootboxes work in games like Destiny 2 and Overwatch, where there is a constant source just from playing. And like I said, you take away the justification to have that, it just forces more people into microtransactions.

      This.

      I cringe real hard when I see people using skins that cost real-world-money like the Tracer/Genji ocean skins.

      I have mixed feelings when I see the Mercy 'Pink' skin though due to the nature of the skin and how it was sold

      The only time I bought them was the one year anniversary as I was trying to get all the dances. I got so burned by them I stopped playing overwatch. I haven't touched it since.

      I have played 40 levels in this event, and got one skin form what 50 boxes. This idea that I have earned something from playing is up laughable.

    The take away I got from and was pleasant to hear was they have tempered microtransactions due to content roll out... ie without some form of ingame evebt ir update,new microtransactuons are seen as a bad move.

    Why would I spend money when there's nothing worth buying? Loot boxes are shit and unfulfilling, I'd never waste money on them. They'd be better off making limited edition skins available for direct purchase.

    I bought an xbox recently to play games with my little niece and nephew, so started playing Overwatch there instead of on my PS4. After something like 40 levels since the start of the event, I have earn like maybe 50 boxes. I have got a grand total of a single event skin. Now remember I dont have any for the previous years and I still only ended up with one, whats worse, I havent even saved enough to buy the one skin I do want.

    Honestly I have a little spare money at this stage, if I had got a few things I might have bought a stack, but with those odds, there was no chance at all of giving any money at all. .

    And yet, unless I'm misreading their earnings report, Blizzard's 35mil users are still out-earning King's 268 million users.

    The only time it makes sense to buy loot boxes in Overwatch is during the anniversary season when all skins are avaliable.

    Funny that they mention the premium model. When Overwatch first came out and I heard about it and loot boxes etc I was surprised to find out it wasn't free to play. If it had been I would have played it...since it isn't I've never touched the thing.

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