Blizzard, maker of World of Warcraft, slashes 600 jobs

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Blizzard Entertainment, a subsidiary of Activision Blizzard Inc., is eliminating 600 jobs, the Irvine game studio disclosed Wednesday.

The jobs represent 8.2% of the total workforce at Santa Monica-based Activision, which reported having 7,300 workers at the end of 2011.

Blizzard, which publishes the popular World of Warcraft title, said in a brief statement that 90% of the jobs being affected are not related to game development. As a result, the company said its game release schedule for upcoming titles Diablo III, World of Warcraft: Mists of Pandaria, Blizzard DOTA and StarCraft II: Heart of the Swarm remain intact.

‘I also want to emphasize that we remain committed to shipping multiple games this year, and that our development teams in particular remain largely unaffected by today’s announcement,’ Mike Morhaime, Blizzard’s chief executive, wrote in a blog post.

The company did not say what types of jobs were affected nor where the cuts were occurring. Calls to Blizzard spokeswoman Lisa Jensen were not returned.

Once regarded as an unstoppable growth and profit engine, Blizzard’s key title in World of Warcraft has flagged in the last year. The number of subscribers who pay around $15 a month to play the online game peaked at 12 million in October 2010. That number fell to 10.2 million as of Dec. 31, the company reported three weeks ago along with its quarterly earnings.

Released seven years ago, World of Warcraft has had a remarkable run and a staggering profit margin that frequently exceeded 40%. But even hard-core fans have grown tired of the game. And many have migrated to other titles, including Star Wars: The Old Republic, an online game that has garnered 1.7 million subscribers since its December launch.

Blizzard is also duking it out with rival social games such as Kingdoms of Camelot that are increasingly targetting hard-core gamers. It’s also seeing more competition from online games that are initially free to play but sell virtual items. Riot Games’ League of Legends title, for example, has captured millions of players since being released in 2009.

Founded in 1991 by three UCLA graduates, Blizzard has a record of releasing a small number of high-quality titles that has earned it the loyalty of many fans. The company has said it is working on a new online game, but has declined to disclose any details.

Shares of its parent company, Activision, slipped 11 cents, or less than 1%, to $11.95 on Wednesday.

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-- Alex Pham