Blizzard has reportedly created a “smaller” team to create AA games based on its franchises

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Activision and Microsoft have reportedly approved the creation of a new “smaller” team within Blizzard Entertainment, made up primarily of employees from Activision’s mobile-focused King division, to develop new “AA” games based on existing Blizzard properties.

That's according to Windows Central's Jez Corden, whose sources say the new initiative reflects Microsoft's eagerness to “explore and experiment” with smaller teams within a larger organization in response to the “monstrously rising costs” of AAA game development.

Corden points out that Microsoft has had success with titles like Sea of ​​Thieves and Grounded, both of which were made by relatively small teams; naturally, 2023's Hi-Fi Rush, created by a small team within Tango Gameworks, was hailed as a “landmark success” by Microsoft upon its release.

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And if you're wondering why Microsoft shut down Tango Gameworks in May if the studio had already proven successful using a development approach it was looking to further adopt, Corden says that Microsoft Done believes Tango fits its new strategy, but its geographic location made it “logistically difficult for studios to collaborate.”

Returning to Blizzard's new team, Corden says it's “equipped for agility, avoiding some of the bureaucratic bloat” of larger teams. But as for what he'll be working on specificallywhich remains unclear. The goal, however, is presumably to create smaller-scale, lower-budget titles built around Blizzard's existing franchises, which could potentially mean anything from current hits like Overwatch to long-dormant series like StarCraft.

Xbox chief Phil Spencer told Wired in 2022, about a year before Microsoft approved the Activision acquisition, that he was “excited to meet with the teams at Activision Blizzard and King to talk about the back catalog and the opportunities we might have there.”

All of which leaves only the question of platforms Blizzard’s reported new studio could be a good fit, given that it’s populated by King developers who have historically created mobile games. Corden notes that a mobile focus would make sense for the new team, given that Microsoft is currently looking to launch an Xbox game store for iOS and Android following new EU laws requiring Google and Apple to open up their platforms to competitors. But with Microsoft exploring a multi-platform strategy for its releases, anything is possible.

Today’s report follows news that Microsoft’s gaming revenue grew 44 percent in the latest quarter, despite declining Xbox console sales, largely thanks to its $69 billion acquisition of Activision Blizzard. Without Activision Blizzard on its books, that growth would have been just three percent.

Microsoft is also starting to leverage its Game Pass acquisition. Diablo 4 was the first Activision Blizzard game to hit the streaming service in March, while Call of Duty: Modern Warfare 3 launched for members this July. Additionally, Black Ops 6 is coming to Game Pass on October 24, but only to Game Pass Ultimate and PC Game Pass subscribers, following Microsoft’s recently announced overhaul of the service.

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