Two actions this week reflect the ongoing buzz created within the video game entertainment industry by the increasing popularity of Cary-based Epic Games’ “Fortnite.”
Epic asked a federal judge to throw out a lawsuit from a rapper who says the video game is illegally using a dance he created. Meanwhile, video game maker Activision Blizzard is laying off nearly 800 workers as it braces for a steep downturn in revenue following the best year in its history due in part to Fortnite’s success.
The cutbacks announced illustrate the boom-and-bust cycles in an industry whose fortunes are tied to video games that can have a relatively short lives before players move on to the next craze.
Right now, Epic’s Fortnite is a hot fad that has been siphoning attention — and potential sales — from the titles made by other companies.
In the law suit, filed the motion Monday to dismiss the lawsuit filed in December by 2 Milly, a Brooklyn-based rapper whose real name is Terrence Ferguson. He alleges that “Fortnite” uses the “Milly Rock,” a dance he came up with in 2011 that became popular after a 2015 song and video.
Epic Games’ attorneys argue in the motion that the dance known in the game as “Swipe It” is substantially different from the “Milly Rock,” and that even if it weren’t, courts have held that simple dances can’t be copyrighted.
2 Milly’s attorney David Hecht responded in an email to the Associated Press saying choreography does have copyright protection, and there is no doubt that Epic Games used and tried to profit off the “Milly Rock” dance.
Epic tells Fortnite fans with complaints to ‘reach out to us’ after Better Business Bureau’s ‘F’
The rapper was the first of several artists, including actor Alfonso Ribeiro and rapper BlocBoy JB, to sue “Fortnite” over dances used in its “emotes,” short celebrations that users can buy for their characters to use to celebrate kills within the game.
A judge has scheduled arguments on the dismissal motion for March 4.
The layoffs
Although Activision also still owns popular games such as “Call of Duty” and “Candy Crush,” it expects its revenue this year to fall by about 20 percent to $6.03 billion.
Activision will cope trimming 8 percent from its workforce of nearly 10,000 people and assigning more of its remaining employees to work on “Call of Duty,” ”Candy Crush,” and several other of its most popular titles.
The Santa Monica, California, company had already reshuffled its leadership, even though it profits rose last year by more than five-fold to $1.8 billion. Revenue climbed 7 percent to $7.5 billion, the highest since Activision’s inception 40 years ago.
Report: Wildly popular video game Fortnite makes Epic Games founder a billionaire
But CEO Bobby Kotick said the performance fell shy of the company’s expectations, prompting a re-evaluation of its priorities and a pruning of its workforce.
This year “will require significant change to enable us to achieve our long-term goals and objectives,” Kotick told analysts during a Tuesday conference call. “We’re making changes to enable our development teams to create better content for our biggest franchises more quickly.”
Severance pay and other costs incurred in the layoffs will result in accounting charges of about $150 million.
Even as jettisons workers as some of its revenue evaporates, Activision said it will also boost its stockholder dividend by 9 percent from last year to 37 cents per share.
Activision’s stock rose $1.33, or 3 percent, to $43 in extended trading after the layoffs were announced.
