Activision revealed the brutality of its latest redundancy operation over the weekend by confirming that Red Octane’s offices had closed down with substantial jobs cut.
The closure of RedOctane – a studio which only a year ago appeared in excellent health – adds to a worryingly growing list of Activision subsidiaries faced with the axe. It has been reported that as many as development 300 jobs have been cut by Bobby Kotick’s company following its recent financial report.
After Activision told Develop on Thursday that the company was restructuring, over the weekend the publisher confirmed to Kotaku that it was “relocating RedOctane to our Santa Monica headquarters” – suggesting that the brand could be kept alive.
Kotaku reported as many as 40 workers had been laid off, though Activision doesn’t reveal these kinds of figures. The publisher informed investors last week that during the final three months of 2009 its net loss nearly quadrupled to $286 million – damage done, in part, by the sliding sales of Guitar Hero games.
Warning signs had fired in early February when Dan Rosensweig, CEO of Activision’s Guitar Hero division, suddenly quit the company after less than a year after his appointment.
His swift replacement, David Haddad, was hailed by Activision as the right leader to “improve profitability."
Just as the music game genre was heading towards a commercial plateau, in ay 2006 Activision bought RedOctane for $100 million. The popularity of the series was once without question, with Activision previously stating that Guitar Hero had generated over $1b in sales.
But a sudden, sharp sink in sales suggested that Guitar Hero – and indeed the entire guitar-based music game genre – has dashed off a cliff.