Blizzard lays off 10 people from Hearthstone team, while game revenue continues to plummet after exit from China

Blizzard has laid off some staff from the Hearthstone team, describing the process as organizational changes. But let’s also look at the game’s performance in the mobile market this year and see how the company’s exit from China has affected its revenues.

The new round of job cuts at Blizzard Entertainment was first reported by tools engineer Hunter Curren, who was laid off “without notice” after working at the studio for 18 and a half years. “The Hearthstone Team is apparently being restructured and my Tools Engineer role is no longer needed,” a post on LinkedIn reads.

In the comments, Hunter noted that “it was completely expected on my end,” although Hearthstone itself “was doing well.”

Another member of the Hearthstone team, senior producer Joe Belousek, was also laid off after two years at Blizzard. The game’s senior game producer Rosalie Kofsky “got caught, too.”

According to Kotaku senior reporter Ethan Gach‘s sources, 10 people have been affected by the layoffs.

Activision Blizzard eventually confirmed the cuts in an official statement to Gach: “Organizational changes were made to the Hearthstone team; as a result a small number of roles have become redundant. We want to thank these employees for their many contributions.”

Source tells me 10 people impacted, all within Hearthstone. Activision Blizzard statement:

“Organizational changes were made to the Hearthstone team; as a result a small number of roles have become redundant. We want to thank these employees for their many contributions.” pic.twitter.com/bxMsrsAy70

— AmericanTruckSongs9 (@ethangach) September 27, 2023

Earlier this year, Blizzard also laid off 50 employees from its esports division. They were fired without warning, and the news reportedly came as a “complete shock to everyone.”

Is Hearthstone really doing well in terms of revenue?

It is hard to say whether Hearthstone remains truly successful for Activision Blizzard in terms of revenue, as it has been a while since the company has reported any official figures.

According to AppMagic, Hearthstone is still one of the highest-grossing collectible card games on mobile. However, it currently lags behind some really strong competitors.

With over $20.8 million generated from in-app purchases, Hearthstone ranks as 5th top-grossing CCG this year so far, behind Magic: The Gathering Arena ($22.2 million), Yu-Gi-Oh! Duel Links ($23.6 million), Yu-Gi-Oh! Master Duel ($37 million), and Marvel Snap ($80.5 million).

Top 10 highest-grossing collectible card games of 2023 so far (via AppMagic)

It is worth noting that Hearthstone’s revenue has been declining over the past few years. In 2022, it generated $61.5 million on mobile. And in 2021, its IAP revenue was over $71.3 million, which made it the third top-grossing CCG that year globally, behind Yu-Gi-Oh! Duel Links ($117 million) and Harry Potter: Magic Awakended ($192.6 million).

So what could be the reason for such a sharp drop?

When looking at Hearthstone’s lifetime revenue, China has always remained the top market for the game on mobile. According to AppMagic, it accounts for 28% of its total IAP revenue of $833.6 million, followed by the US (23%), South Korea (9%), and Japan (6%).

Rewind to November 2022: Blizzard broke up wth NeatEase, its longtime partner in China, ending their 14-year partnership. As a result, all of the company’s games, including World of Warcraft, Overwatch, Diablo, and Hearthstone, went offline in the country on January 23, 2023. Blizzard has yet to find a new partner, making it impossible for the studio to publish and operate its titles in China, as well as comply with local strict content regulations.

As can be seen from the chart below, China is nowhere to be found in the top Hearthstone countries by revenue in 2023.

Hearthstone’s top 5 countries by revenue in 2023 so far (via AppMagic)

Between January 1 and September 26 2023, Hearthstone reached $20.8 million in IAP revenue globally. This is down 57% from the same period last year, when the game generated $48.7 million, of which $20.7 million came from China.

Hearthstone’s revenue in 2022 vs. 2023 (so far), according to AppMagic

Hearthstone is also available on PC, making it hard to estimate its lifetime earnings across all platforms. Of course, there might be no connection between falling revenues and the recent job cuts, but losing the top market could definitely hurt the game in the long run.

So it is interesting to see whether Activision Blizzard is able to find a new licensing partner in China anytime soon. Not to mention that it will be difficult for the company to regain the trust of local players, who were really angry about the news.