Activision lays off about 200 employees, shuts down Santa Monica studio Luxoflux

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Video game publisher Activision Blizzard Inc. is laying off about 200 employees and shutting down its Santa Monica-based development studio Luxoflux, a spokeswoman confirmed Wednesday afternoon.

Activision, which is headquartered in Santa Monica, reported Wednesday that its fourth-quarter 2009 net loss nearly quadrupled to $286 million. Part of that loss was due to deferred revenue from its online efforts, but the company also reported weakness in sales of its Guitar Hero games and those products aimed at casual players.


Luxoflux, which Activision acquired in 2002, employs about 56 people. It has recently worked on movie-based games aimed at the casual market that Activision is pulling away from, such as 2009’s Transformers: Revenge of the Fallen game. Some Luxoflux employees may be offered jobs at another Activision studio in Santa Monica, Treyarch, which producers titles for the successful Call of Duty military franchise, a person familiar with the situation said.

About 50 of the 170 employees at Activision-owned developer Neversoft were laid off Wednesday as well, a person close to the Woodland Hills studio confirmed. Neversoft is the lead developer for games in the Guitar Hero franchise, whose sales slumped 35% last quarter. The company said Wednesday that it would release just 10 versions of Guitar Hero games this year, down from 29 last year.

Activision is also cutting staff at its Vancouver-based Radical Entertainment, which it acquired as part of its merger with Vivendi Games in 2008. More than half of the 180 people there lost their jobs, a person familiar with the situation said. Remaining employees at Radical are working on a video game version of Sony Pictures’ next ‘Spider-Man’ movie, set for release in 2012.

‘We are directing our resources against the largest and most profitable business segments, and as part of this initiative, we are realigning our resources to better reflect our slate and the market opportunities,’ an Activision spokeswoman said in a statement. ‘At the same time, we are increasing our digital/online capabilities as we expect that digital/online will continue to become a more meaningful part of our business model in the years ahead.’

-- Ben Fritz