Report: Blizzard cutting development costs in wake of Overwatch success

Report: Blizzard cutting development costs in wake of Overwatch success

Developers are reportedly being told to try and spend less money at fan favourite games firm Blizzard.

That's according to a report from Kotaku into the development of Diablo IV, with employees telling the outlet that there is pressure to reduce costs at the California studios. This is - in part at least - due to the success of the firm's most recent new IP, Overwatch, which according to Activision Blizzard's most recent investor call has raked in $1bn in revenue since its May 2016 launch.

“We are being told to spend less at every corner because we have no new IP,” said one former developer.

“Because Overwatch set this bar of how much we could earn in a single year, there’s a ton of pressure from Activision to get shit moving. They want something to show shareholders.”

Earlier this year, CFO Amrita Ahuja told staff at a 'Battle Plan' meeting that one of Blizzard's goals for the year was to reduce the amount of money it was spending.

“This is the first year we’ve heard a priority being cutting costs and trying not to spend as much,” said an employee present at the meeting.

“It was presented as, ‘Don’t spend money where it isn’t necessary.’”

Another ex-Blizzard employee added: “You would’ve thought Blizzard was going under and we had no money. The way every little thing was being scrutinised from a spend perspective. That’s obviously not the case. But this was the very first time I ever heard, ‘We need to show growth.’ That was just so incredibly disheartening for me.”

This is in stark contrast to what Blizzard's new president J Allen Brack said for the company's future. The newly-appointed exec says that the firm is planning on making big investments in its IP in order to bring them to a broader range of consumers. Allen replaces co-founder and president Mike Morhaime who announced his departure from Blizzard in October

Kotaku's reporting sure sounds like that Activision's big and consistent returns policy is having an impact on the way that Blizzard operates, but the games giant's management might want to take a look at which of these two companies is more successful.

The former has famously said that it only wants to be operating billion-dollar franchises - betting its success on a few key series. This was a statement made at the height of the Call of Duty IP's success and when Guitar Hero and Skylanders were still making the big bucks. Activision has historically focused on annual releases, too.

Blizzard, by contrast, is a game company that takes its time with new releases, only launching them when they are deemed perfect. 

Of course, as a publicly traded company the end goal is always about maximising profit and return on investment. The concerns raised by developers could well be staff experiencing a degree of scrutiny at a company that has always seemed - on the surface - to operate a bit of a carte blanche policy with development budgets. 


PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.