Report: Lackluster Game Sales Lead To Studio Closures, Layoffs At Activision

Guitar Hero 5

While rival gaming companies like EA and *THQ* were laying off thousands of staff earlier this year, Activision (NSDQ: ATVI) kept chugging along. No more. Slumping game sales industry-wide have forced the company to start cost-cutting; the first casualty is former Scratch the Ultimate DJ developer 7 Studios. Reports say roughly half the team, or about 30 employees, were laid off. In a statement to Kotaku, Activision confirmed that there were layoffs as part of a business “realignment,” but didn’t disclose a number.

The company also shut down Shaba Games, an S.F.-based studio that developed a number of Tony Hawk titles, and Spider-Man: Web of Shadows. About 30 employees lost their jobs as a result. Shaba had been up and running for 12 years. Kotaku’s sources hint that the round of layoffs was tied to “sluggish” performance of Guitar Hero 5, though Dan Rosensweig, CEO of the Guitar Hero business, recently told GamesIndustry.biz that the company was “pretty happy” with the games’ sales.

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