Activision and Vivendi Games to become Activision Blizzard

| 0 Comments
    You've got my Activision in your Blizzard!
    No! You've got my Blizzard in your Activision!
    Activision Blizzard: two old game companies with one new name.

Early this morning, Activision and Vivendi announced the merger of Activision Games and Vivendi Games into a new company called Activision Blizzard. I have to give their PR folks major props, because this is one hell of a merger, and quite honestly, a smart move to release the news on a Sunday morning. Most video game journalists are enjoying their weekend or two wrapped up in the whole Gamespotgate scandal and hastily putting out articles that just regurgitate the press release from Vivendi (in PDF), which is filled with a lot of financial nonsense, which basically says that Vivendi is buying into Activision with 52% ownership, but that Activision's CEO will remain in control of the company, and that at a premium purchase price of 27.50 per share that Vivendi will be paying, should ensure that the stock price of Activision (ATVI - closed at 22.15 on Friday) is supported during this transitional period.

Blizzard is a wholly owned subsidiary division of Vivendi Games, and if you read the press release carefully, you'll notice that while the name of the company will henceforth be called "Activision Blizzard", what Activision is actually merging with is not just Blizzard Entertainment but all divisions of Vivendi Games, which includes Radical Entertainment, High Moon, Swordfish, Massive Entertainment, Sierra, Sierra Online, and Vivendi Mobile. Not only that, but the board of directors for Activision Blizzard is mainly comprised of former corporate officers of Activision and Vivendi Games, not of Blizzard Entertainment -- so the name of the merged company should be more appropriately Activision Vivendi, but obviously the only marquee of any value in the Vivendi portfolio is Blizzard, as the more well-known developer of World of Warcraft.

When I was working for Blizzard, we were still under the same kind of corporate structure where Blizzard was somewhat autonomous, but the biggest cost in morale was that as a game company, operating underneath the Vivendi umbrella meant that no matter how successful a game was, the effect on general revenue for the parent organization was minor at best, because the when you're part of a conglomeration, the contribution from Blizzard, despite the success of the game titles in profitability, meant very little to Vivendi as a whole -- since they day they bought Blizzard from Cendant Corp, they've been trying to sell Blizzard (and the rest of Vivendi Games) but couldn't find a sucker to pay the $1 billion dollar price tag they wanted for all of Vivendi Games. It was rumored that Microsoft offered 100 million for Blizzard the last time Vivendi was selling off non-core assets in 2003.

I think that with the joint management from both Activision and Vivendi Games, things are going to be rough as they make the transition, but if they can keep the management of the Blizzard gaming division as "hands-off" from Activision as they've kept it from Vivendi, Blizzard will continue to make good games if they can stick to their philosophy. The question at this point is how Activision will handle the management of the golden goose.

BBC: Video game giants in $18bn merger

Leave a comment

Recent Entries

H1N1 Outbreak At PAX '09
Those of use on the convention circuit know that a lot of fanboys plus convention center equals an epidemiologist's nightmare;…
Scream Sorbet
I don't tend to like sorbet (or sherbet, the fizzier dairy-added version); while flavorful, it always seemed to me that…
Golden Age Comics are the New Benjamins
Recently, a meth ring was broken up, and the investigators discovered over $500,000 worth of comics in plastic cases. It…