Blizzard Entertainment, now owned by Microsoft Corp., announced major layoffs on Thursday as part of a company reorganization. The video game maker canceled one of its largest projects, codenamed “Odyssey,” resulting in nearly 2,000 employees being laid off. This represents 8% of Blizzard’s total staff.
Employees received the devastating news in an email from Microsoft early Thursday morning. Many on the Odyssey development team were directly impacted by the layoffs. The announcement comes just three months after Microsoft acquired Blizzard’s parent company, Activision Blizzard, for $69 billion in the largest video game acquisition in history.
In addition to the layoffs, Blizzard also fired several top executives as part of the restructuring, including Chief Design Officer and company co-founder Allen Adham and President Mike Ybarra. Blizzard said it will announce its new president next week.
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Blizzard is best known for developing popular video game franchises like Diablo, World of Warcraft, and Overwatch. Recently, the company invested heavily in the new Odyssey project, assembling a team of over 100 employees to work on its development. The game, which takes place in a new universe, took longer than six years to develop than a lot of other Blizzard incubation projects. The future of these initiatives outside of current franchises is currently unknown.
In a statement, Blizzard spokesperson Andrew Reynolds said Odyssey development has ended “as part of a focus on projects that hold the most promise for future growth.” Some Odyssey team members will shift to early-stage games Blizzard currently has in development.
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Odyssey originated in 2017 as a survival game concept from World of Warcraft developer Craig Amai. Inspired by games like Rust and Minecraft, early plans envisioned a polished survival game supporting up to 100 simultaneous players in large open worlds. The project staff grew steadily over subsequent years before Microsoft’s 2022 acquisition brought more resources and attention.
Despite increased funding, Odyssey apparently struggled due to technical issues tied to its gaming engine. Initially built with Epic Games’ popular Unreal Engine, Instead, Blizzard gave the Odyssey team instructions to use Synapse, an internal engine that was first created for mobile games and was intended to be used by the company for many of its projects, but that resulted in serious issues since the technology took a while to come together. Instead, Odyssey’s artists spent time creating content in the Unreal Engine that they knew would have to be abandoned later, according to the people.
“As difficult as making these decisions are, experimentation and risk taking are part of Blizzard’s history and the creative process,” spokesman Reynolds said. “Ideas make their way into other games or in some cases become games of their own. Starting something completely new is among the hardest things to do in gaming, and we’re immensely grateful to all of the talented people who supported the project.”
Activision Blizzard was acquired by Microsoft for $68.7 billion in October after 20 months of legal disputes with US and UK regulators. Bobby Kotick, the former CEO of Activision Blizzard, announced his resignation at the end of December, and Microsoft did not name a direct successor.
Less than a few months have passed since Sarah Bond was elevated to the position of Xbox president, overseeing all Xbox platform and hardware development, which coincided with the current round of layoffs.
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Also, Microsoft Studios’ Matt Booty received a promotion to president of game content and studios, a position that gives him control over Activision Blizzard, ZeniMax Studios, and Bethesda. He is now subordinate to a group of Activision Blizzard executives.
Some Blizzard employees were hoping that after Microsoft acquired the company, they could return to Unreal Engine instead of attempting to complete the game on Synapse. Ybarra stated that their new parent company will give them the freedom to use the technology of their choice without requiring them to go through the board of directors as they did in the past in an interview at BlizzCon in November. He declared, “The tech leaders will decide what the engines are.“
The last major layoffs at Microsoft, which affected 10,000 workers, were announced a year ago. Next week, the software company is scheduled to release its fiscal Q2 2024 earnings, which will include the first-ever results from the Activision Blizzard acquisition. With Synapse struggling and an optimistic 2026 target release looking increasingly unrealistic, Microsoft ultimately pulled the plug on Odyssey as part of its restructuring and layoffs at Blizzard this week; underscoring major changes already underway at Blizzard.
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The Odyssey 2 was a pretty cool console. Wait, what were we talking about again? Oh, right. Fuck Microsoft, fuck Activision and fuck Blizzard. lol