Layoffs, while unfortunate, are nothing new or unusual, especially in the current economic climate. But this one bears a mention, if only because of the inevitable conspiracy theories which will undoubtedly spring up around it. Some background: Prior to its acquisition, 7 Studios was developing a game called Scratch: The Ultimate DJ, obviously a potential competitor to Activision's own DJ Hero, which comes out later this month. Activision apparently attempted to buy the rights to the game and when that failed, it bought 7 Studios instead.
This of course spawned allegations of shenanigans, as the deep-pocketed Activision appeared to be buying the studio only so it could kill Scratch and have an unimpeded run at the DJ music game market. Activision protested, saying it had done nothing wrong, an assessment shared by the Los Angeles Superior Court in its ruling on a lawsuit brought by Scratch DJ Game LLC partners Genius Products and Numark Industry. Nonetheless, 7 Studios was ordered to hand over the Scratch source code to its original publisher, which it had initially refused to do, and "wall off" game-related information and "trade secrets" from other companies, including Activision.
But the feeling that hijinks were afoot never really went away and the news that Activision has now cut about 30 people from the 7 Studios payroll, which represents roughly half of the developer's entire staff, isn't going to help. Activision, of course, denied that anything untoward had taken place. "Since the completion of its acquisition by Activision, 7 Studios has realigned its business to focus its development resources on the music genre," the company said in a statement to Kotaku. "As a part of this realignment, the studio is reducing its workforce to better reflect Activision's upcoming slate of music-based games."
I don't think it's particularly likely that Activision went to all this trouble just to put the boots to a single competing product; this kind of housecleaning is commonplace at newly-acquired companies. But optics are everything in situations like this and I think we can all agree that these optics just ain't good. Work continues on Scratch: The Ultimate DJ, meanwhile; following Activision's purchase of 7 Studios, the project was taken over by Commotion Interactive.