A lot of other comments are saying, this doesn't make sense, there'll always be someone getting ranked low, this doesn't make sense, it's arbitrarily punishing teams full of high performers, this doesn't make sense, no matter how hard you work, the only thing that matters is whether or not you're in the bottom 5%, applying a bell curve to a small population doesn't work, etc etc. Correct, those are all great reasons why this is silly from an objective standpoint concerned with worker's wellbeing or just sheer rationality, but from a corporate profit standpoint, it doesn't matter (sort of, see below). All that matters is there are mechanisms in place to extract more labor for less money.
Where they failed is to account for an uptick in societal concern for worker's wellbeing. Now this guy get fired and there's a story, that's bad PR. There's a binary demographic in the USA right now, those that will care about this guy and worker's rights, and those that will arbitrarily defend the business' right to do whatever it pleases (and be opposed to things like unions on ideological grounds). From my observations it seems the former group has more buying power because companies seem to cater their actions more towards that group in general, although it is hilarious and frustrating how bone-headed corporations continue to be when it comes to worker's rights, fighting tooth and nail and spending millions to crush unionization efforts.
I write poorly, to summarize what I mean to say is it was a mistake from all angles, capitalist or otherwise, to treat this guy the way they did. Now they blew up a story and now we have Yet Another Data Point for blizzard being shit to their employees. Now a bunch of people are learning about stack ranking and how stupid it is and that blizzard is still doing it. If they wanted to be effective extractors of labor value they should have found more subtle ways of doing it, like swapping out guaranteed vacation time for "unlimited" policies and then implementing a "dynamic work ethic" culture that made people take less vacation time and continue to work remote while on vacation.
Or, you know, they could just be really smart and give their employees shared ownership in the company, making it more profitable in general, more stable, and creating a more positive work environment. That would of course mean less share of profit for the shareholders which is why this will of course never happen.
I write authoritatively because I don't know how to hedge well, I'm actually very curious what others here think about how this reflects in general on the overall push in the usa for more unionization, particularly of software engineers and especially for the games industry. What other solution here is there, given that blizzard can't be trusted to do well by its employees? Someone else here wrote "start a competing company!" but I don't think we need to do much to agree that starting a blizzard competitor from your garage is a kind of silly idea (though I do much prefer indie games, what I mean is that an MMO or blizzard-scale games are simply out of scope for these kinds of companies).