Activision and Blizzard Merger

Yep. That’s right. Activision and Blizzard merging

Wow. I’m not quite sure what I think about this right now, although I’ll probably comment on it on my personal blog from the business perspective.

The gamer half of me is a bit perplexed though. Blizzard probably realizes they can’t rely on their Warcraft/Starcraft franchise forever and simply can’t come up with any good new ideas. Activision might be a good source of established IP and franchises, but it has quite a checkered history. I almost feel like Activision just won the lottery here and Blizzard could have had better merger partners.

The one thing I am thankful for though, is that they did not merge with EA. Because as you all know, EA has the touch of death. The only people that win in a EA acquisition are a few execs. Everyone else gets a wedgie and kick in the mouth.

More commentary later…

12 thoughts on “Activision and Blizzard Merger”

  1. This just in…

    ActivisionBlizzard just announced their new game: World of Musicians!

    Now you and 40 close guildmates can raid ancient music halls and challenge Epic Conductors to a battle of sound. For those of you not interested in the raiding scene, there will be 5-man instanced bars and private parties. Soloers are stuck with street corners and coffee shops.

    Sounds like fun to me, but my only fear is that they’ll nerf percussion as soon as I hit the level cap…

  2. @Markus: Sounds a lot like LotRO to me. All hail the ‘Mighty Mighty Breetones’.

    It’s actually Vivendi Games that’s merging with Activision, which also brings Sierra along. While I”m hopelessly wishing for another King’s Quest game, at least the RTS output will be strong.

  3. That story is quite misleading.

    As Jezebeau pointed out, it’s Vivendi and Activision that are merging, not Activision and Blizzard. Apparently they decided to use that name because Vivendi owns the rights to it and it gets media attention. Equally apparently, the BBC’s tech correspondent can’t be bothered to do more than ten seconds of research before writing an article.

  4. It’s not misleading, Blizzard and their stellar profits from WoW have been dominating the Vivendi financial statements and are the sole reason a deal like this is even happening with Activision? Do you seriously think Vivendi would have a chance to acquire a 52% controlling stake in Activision if they didn’t have Blizzard and World of Warcraft’s profits?

    This deal is totally in favor of Vivendi/Blizzard and they’re calling the shots on this one. Given the stated margins and terms there’s no way this won’t go through, nor will any of the execs try to block it given the bonuses they’ll be looking at.

    Very little will change for Blizzard, they’ve got the pull to call their own shots as their own division within the combined company as long as they keep earning.

    As for the rest of the company, anything is game as most mergers see a bit of cost cutting with the layoffs of “redundant” staff..

  5. Blizzard is a tiny tiny part of Vivendi’s overall business. This merger creates a new company where Blizzard will be able to take credit for their stellar performance within the context of a much smaller all-gaming company instead of a massive corporate umbrella.

    I like those comments about EA, they make me lol because they’ve been so true so far. But I get the feeling that EA would like to change in the future. They’re going to have do something differently now that they’re being challenged by a rival their own size. (and beaten outright in every sector except sports, mind you)

    I disagree that Blizzard can’t come up with new ideas. I’m sure they can. But it’s not very profitable to exploit them. Blizzard found a gold mine underneath their Warcraft franchise, and I’m pretty sure there’s another one under their Starcraft franchise. They’re focused on making money on proven ground before they go off risking time and money on untested properties.

    That kind of laser focus hasn’t exactly hurt their bottom line so far, so it’s hard to say it’s been bad for them as a company.

    In fact, one could characterize this merger as Blizzard buying Activision. Except of course it’s more like Blizzard cracking the corporate shell they’ve been stuck in.

  6. Vivendi has been looking for a way to spin off their games division for years. So yes, I’m pretty sure this deal would have happened without the enormous popularity of a certain Blizzard title, if on slightly less favorable terms.

  7. I’ll have to disagree Aufero…I haven’t heard anything about Vivendi wanting to spin off the games division. It is a huge cash cow for them. If anything, they have gained value here, not sold it off.

  8. @Nicodemus: I think, actually they have wanted to spin it off. Of course, “spinning something off” doesn’t mean you lose money on the transaction, it usually means you simply don’t have to manage it any more.

    This transaction is a big win for Vivendi because now they don’t need to pay attention to Blizzard any more (they’ve got the Activision guy in charge now) but they still get paid just the same. Even better, since you can buy stock in Blizzard now, they stand the chance of being able to realize huge profits on their ownership stake if the stock takes off. They could sell off 15% of the company and still have a majority vote.

    I kind of also get the impression that this might have been engineered by Blizzard itself. I’m sure Bungie’s recent defection from the Microsoft monolith attracted notice within other like companies.

    I wouldn’t be surprised if the EA-Bioware purchase provided an opportunity for them to appeal to Vivendi to allow them to restructure the company in a way that will eventually allow Blizzard more autonomy. Perhaps even recapture control of their destiny completely someday.

    They had creative freedom before, but they didn’t reap the benefits of their stunning success individually; the average employees of Blizzard aren’t millionaires. But now, through stock options in a much smaller company, they could all become millionaires if their next venture pays off big.

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