Activision Blizzard Entertainment is sharpening its focus on its own IP – including the Overwatch League’s second season and a new Esports league based on “Call of Duty” – amid a broad restructuring that will shed 784 jobs.

The publisher unveiled the restructuring as it prepares for this week’s start of the Overwatch League’s second season that will feature eight new teams and home and away matches as games move outside Blizzard Arena in Los Angeles for the first time.

While eSports has taken “a lot of focus” outside Activision’s core games business, the league had “lots of early success and overall we think it’s the right decision for the Overwatch game and franchise,” COO Coddy Johnson said in releasing Q2 earnings. Activision didn’t provide timing for the Call of Duty league.

The restructuring – the U.S. portion will be complete by late Q1 and international by year-end – will focus on non-game development positions, Blizzard Entertainment Pres. J. Allen Brack said.  At the same time, the number of developers focused on core games will increase 20%, CEO Bobby Kotick said. Activision staff also was freed up after the company sold the publishing rights to the “Destiny” title back to developer Bungie late last year. Activision will take a $150 million charge for the restructuring.

“We’re making changes to enable our development teams to create better content for our biggest franchises more quickly,” Kotick said.

The company showed a $650 million profit in Q4 ended Dec. 31, compared to a $584 million loss a year ago as revenue rose 19% to $2.38 billion, short of analysts’ forecast for $3 billion. Subscription (World of Warcraft), licensing and other revenue rose 20% to %1.53 billion, while product sales jumped 9.6% to $808 million. Activision forecast revenueof $6 billion for the year ending Dec. 31, down from $7.5 billion in 2018 and part due to the sale of publishing rights for  Destiny.

The gains came despite sales of the new “Call of Duty: Black Ops 4” falling short of Activision’s forecast due to weaker-than-expected demand and lower prices, Johnson said. Videogame publishers have struggled to match the popularity of Epic Games’ free-to-play “Fortnite” and its battle royale feature. For example, Electronic Arts’ Q4 sales of Battleground, which will add a battle royale feature in March, fell short of its forecast, but it gained ground with the recent release of the free-to-play title “Apex Legends,” which has gained 25 million players since its release last week. The recent Call of Duty game has a Black Out battle royale mode, but it is only available to those that buy the game.

Contact:

Activision Blizzard Entertainment, Coddy Johnson, COO, 310-255-2000, coddy.johnson@activision.com