King shuts down former Z2Live mobile game studio in Seattle, cuts 78 jobs

Activision Blizzard said it is laying off hundreds of employees today, and part of the fallout is that King’s mobile game studio in Seattle will be shut, resulting in the loss of 78 jobs, according to an unnamed source.

Activision Blizzard did not comment on specific layoffs, other than noting that it would lay off 8 percent of its workforce, mostly in non-development positions.

King, the maker of Candy Crush Saga, acquired the studio for $45 million in 2015 with the acquisition of Z2Live, which was responsible for the iOS flight sim MetalStorm: Online as well as the cartoony strategy game Battle Nations for mobile and PC. It was likely cut as Activision Blizzard said the company is focusing on its core franchises. One of the studio’s games, Paradise Bay, was successful. The studio generated an estimated $200 million over the last few years, but it was still shut.

King had 268 million monthly active users in the quarter, growing sequentially, driven by the successful launch of Candy Crush Friends Saga. Fourth quarter segment revenues grew 5 percent year over year to $543 million and operating income increased 28 percent year-over-year to $207 million.

King said that Candy Crush Friends Saga saw strong monetization and retention trends, contributing incremental growth for the Candy Crush franchise, which grew net bookings and MAUs year-over-year and quarter-over-quarter.

Measurement firm Sensor Tower estimated that titles from Activision, Blizzard, and King, reached an estimated $501.3 million last quarter globally on the App Store and Google Play.

This represented a 0.4 percent year-over-year decline from the fourth quarter of 2017. King’s slate of titles accounted for 92 percent of the total, and gross spending in them was off 0.1 percent year-over-year to an estimated $461 million. Spending in the King catalog was led by the original Candy Crush Saga, which brought in an estimated $234.5 million for the quarter, down about 3.5 percent from a year earlier.. Blizzard’s Hearthstone topped Activision Blizzard’s mobile gaming revenue outside of King’s titles at $40 million, matching its player spending for 4Q17.

Correction, 2:57 p.m. Pacific: King’s Seattle studio generated an estimated $200 million over the last few years, not in 2018 as we first reported. We have corrected the error.