Vivendi and Activision merge to form Activision Blizzard

[Zaphod]

But just because I'm curious, what else does Vivendi have?

Apart from the Sierra publishing branch, they've got several other dev houses as well: High Moon Studios in San Diego, CA; Massive Entertainment in Sweden; Radical Entertainment in Vancouver, B.C.; and Swordfish Studios in Birmingham and Manchester, England.

Then there's a 'casual division' and a mobile division. Blizzard may have been Vivendi Games biggest cash cow (by far), but there was a lot more to them than that.

Where does it say Activision acquired Blizzard? It says they merged and even now I'm not clear at all on this. Vivendi OWNS Blizzard. This is a Vivendi and Activision merger, so I'm REALLY confused why people keep sayings its a Blizzard and Activision merger.

According to the financial news, it was actually Vivendi acquiring a controlling stake in Activision, then proceeding to merge it with its games division as a new company. Quite the opposite of Activision buying Blizzard.

Under the arrangement announced Sunday, the companies said Vivendi would pay $27.50 a share and make a cash infusion of $1.7 billion to acquire a 52 percent stake in Activision, valuing the combined company at $18.9 billion. Vivendi will then fold its game operations into those of Activision in the new company. [...]

Depending on how this works out, Vivendi said it could ultimately own 68 percent of Activision Blizzard on a fully diluted basis.

 

[Skrying]

Doesn't anyone think it's weird that someone is worried about Blizzard's "good name" being ruined? They're a game developer. It's not like it's someone's mother.

Games are a form of art, just like a movie, or music. You come to expect a certain quality from a developer just as you would a artist, band, or director. So, I personally don't find my own view as weird. In fact, it makes perfect sense when especially when compared to other areas where name is so important.

 

[ErnstH]

According to the financial news, it was actually Vivendi acquiring a controlling stake in Activision, then proceeding to merge it with its games division as a new company. Quite the opposite of Activision buying Blizzard.

Yup, the thread title is incorrect. Vivendi Games merges with Activision, with Vivendi being the largest shareholder in the resulting Activision Blizzard company (which will be listed on NASDAQ I believe). And I read that at least w.r.t. revenue the resulting company will be bigger than EA, $3.2b vs $3.6b.

 

[Farid]

Because they're all reading in between the lines.

But just because I'm curious, what else does Vivendi have?

It would be incorrect reading though.

Vivendi Universal, as whole, is a much bigger company than Activision. It gaming division, a relict of the J.M. Messier's tantacular ambition days, is only a small part of the group. A small yet quite profitable part, nonetheless.

Even though the idea of selling the gaming division, amongst other "non-core business" parts of the company, has been entertained after the downfall of Messier as the iconic captain of the Vivendi's ship, nothing happened on that front. In fact, after a while, things at the company continued unchanged from the tracks set by Messier. The massive success of the product "World of Warcraft" did obviously cement gaming as one of the group most profiatble endeavour.

Now, what happened here seems simple and clear to me. Both Vivendi Universal Games and Activision (and others in the market) knew that a consolidation was inevitable and thus have both agreed on the details of a merger. This one took the form of a take over from Vivendi, which would become the major stake holder of the newly formed entity.

Activision knew they couldn't engulf a player like Vivendi, and knew that buying a lame duck player like Atari or SCI/Eidos might not be enough of a movement, or even worthy of the money at all. And on the other end of the spectrum, I'm not sure Vivendi shareholders would have been happy with an agressive take-over from one of their divisions of a 3+Billion dollar company... If such thing is a reasonable plan at all, in the first place, is debatable as well.

So, they both agreed to the easiest and best solution of all: a friendly take-over, with both players sharing almost evenly the newly formed entity.

is Take2 still independent too?

Take2 is too big of a company to be considered an independent. With that said, they're indeed not affiliated with any bigger publisher... for now.

And I wouldn't be surprised to see EA go after Ubisoft now. They already own some 20-25% of the shares, right?

Well, EA might have to make its move fast, because the French company is getting a more expensive gift each day.

 

[archangelmorph]

Because consoles entail certain sacrifices for the most part. Be it gameplay, graphics, physics, or other (mods for example).

Elitist fanboy talk..

Console don't inherently present a developer with required sacrifices in areas like physics & gameplay (& even graphics are generally alot worse on the PC side when run on the vast majority [medium & low-end] of rigs in consumers homes).. Mods are about the only area where you point could have held if it weren't for the advent of console-internet-connectivity & what Epic are currently doing with UT3 on the PS3 pretty much make this a moot point also..

Granted in certain circumstances a PC game may not be able to carry over to the console platform in it's current form, since it was never designed to work with such a focused architecture (Crysis for example) however this doesn't mean all games will suffer from these issues..

Lastly your not even talknig about ports though, your talking about franchises which could consist of games from a plethora of genres (a la Starcraft Ghost & Halo Wars..) which don't necessarily have to remain consistent with the rest of the titles in the series. There is absolutely no reason why a game like Starcraft Ghost, done by one of Blizzard's (talented) internal teams couldn't sustain the same level of quality with respect to storytelling, polish, rich gameplay & attention to detail on a console as the original Starcraft has shown on the PC since such concepts are high level and thus ubiquitous across whatever hardware platform one would choose to develop on..

 

[Zaphod]

Well, EA might have to make its move fast, because the French company is getting a more expensive gift each day.

Speaking about consolidation, the other French company is pretty much toast, though. (At least their US subsidiary with the traditional sounding name seems to be.) Definitely cheap, but might not be all that attractive as there probably isn't too much value there. Depending on the termination conditions, someone might want to pay for their D&D exclusive, but other than that...

 

[Farid]

Yep, Atari is toast and Infogrames might go down with it

Speaking about consolidation, the other French company is pretty much toast, though. (At least their US subsidiary with the traditional sounding name seems to be.) Definitely cheap, but might not be all that attractive as there probably isn't too much value there. Depending on the termination conditions, someone might want to pay for their D&D exclusive, but other than that...

I wouldn't be surprised if Vivendi (now Activision Blizzard, obviously) gets to salvage the D&D license, if Infogrames has its word to say, since the two company have a good business relationship. If Atari fills for bankruptcy, then I expect a bidding battle between EA and AB for the Hasbro/Wizard of the Coast's exclusive gaming rights. Dungeon and Dragon being an item that would fit perfectly fine in AB's or EA's portfolio, moreso now that Bioware and Phenomic are EA properties.

 

[Zaphod]

I believe Atari is formally a licensor to D&D from their parent Infogrames. A parent having stated that they're unable to keep funding the 'child'.

That's why I threw in the caveat about termination conditions. The D&D license might not survive an Atari bankruptcy. Infogrames' rights to sublicense the property further outside the group (should Atari die) or to sell it on along with remaining Atari assets aren't certain either.

 

[Johnny Awesome]

Games are a form of art, just like a movie, or music. You come to expect a certain quality from a developer just as you would a artist, band, or director. So, I personally don't find my own view as weird. In fact, it makes perfect sense when especially when compared to other areas where name is so important.

Well I like U2, but I don't really care if their "good name" gets ruined by them putting out a shit album. I care about whether or not the album is good so that I can listen to it. Same goes for Blizzard. If they make good games I'll buy them. If not: Not. But I won't lose one second of sleep over what that does to their "good name". That's just creepy.

 

[Zaphod]

Vivendi Games merges with Activision, with Vivendi being the largest shareholder in the resulting Activision Blizzard company.

Strangely enough this seems to be hard to comprehend, even for those who should know better:

Activision Is The Dominant Partner

You can read this multiple ways, but in general, the company whose chief exec becomes CEO in a 'merger' such as this is in the driving seat, business-wise. One good, if more extreme example of this was the GameStop/EB 'merger', which concluded with the EB executives and name largely removed from positions of power in the company.

In this case, Activision boss Robert Kotick will be President and Chief Executive Officer of Activision Blizzard, and Vivendi Games' Bruce Hack will be CCO of the combined company. Vivendi is still majority shareholder, but as for who's actively running the business - you do the math.

Yes, I'll do the math. The company owning (up to) 68% of the stock and controlling the board does. And that would be... *drumroll* Vivendi. The Activision guys rule at their mercy.

Now, it might not be all that brilliant for the Vivendi Games execs to realize that their Vivendi overlords thought that the new kids at Activision were cooler than them, but that's a far cry form making 'Activision the dominant partner'. They're just not.

 

[ErnstH]

Interesting factsheet with details of the merger.

Some tidbits:

Amongst others, the following titles are in the pipeline:
Guitar Hero 4, Call of Duty 5, new Tony Hawk, Bizarre racer.

It also states that Blizzard has >40% margins.

Day to day activities seem to be run by mostly Activision/Blizzard people, whereas the board of directors consist of half Vivendi half Activision/Blizzard.

 

[Farid]

More information, it seems that Vivendi expects the new entity to have a 25% operating margin by 2009. Which would be a quite efficient margin, for information.

And as being stated by Zaphod, Vivendi will have the option to bring its current 52% stake in the company up to 68% in the coming months.

Currently, 70% of all products sold by Activision-Blizzard are IPs entirely owned by the company. In other words, the company is not mainly relying on third party's IPs.

 

[Johnny Awesome]

I like this merger. It will be a nice counterbalance to EA domination. Especially since 80% of EA's big releases are meh games and 60% of Activision big releases are good games IMO.

I'd like to see Ubisoft get bigger and resist acquisition though. Then there would be three big 3rd parties, just like there are three big hardware companies.

 

[Zaphod]

whereas the board of directors consist of half Vivendi half Activision/Blizzard.

Where did you get half/half? It says Vivendi corporate get six, Activision corporate get two and Activision shareholders get three (of which one or two presumably will belong to Vivendi if the buyback scheme is popular among current Activision stock owners). Sounds like a Vivendi controlled board to me (though, they might like ex-Activision people over ex-VG ones).

 

[ErnstH]

Where did you get half/half? It says Vivendi corporate get six, Activision corporate get two and Activision shareholders get three (of which one or two presumably will belong to Vivendi if the buyback scheme is popular among current Activision stock owners). Sounds like a Vivendi controlled board to me (though, they might like ex-Activision people over ex-VG ones).

The factsheet I linked to earlier lists it as six designated by Vivendi, two from Activision's management, and three independents who currently serve on Activision's board of directors. So actually it's six to five.

 

[Zaphod]

Well, exactly. I just added the assumption that if Vivendi ends up with 68% of the stock, one or two of those last three will find themselves serving at the pleasure of Vivendi.

 

[AlNom]

Gamespot Interview with Mike Morhaime (Blizzard co-founder/CEO/president): http://www.gamespot.com/news/6183558.html?om_act=convert&om_clk=newstop&tag=newstop;title;1

 

[Skrying]

Elitist fanboy talk..

Console don't inherently present a developer with required sacrifices in areas like physics & gameplay (& even graphics are generally alot worse on the PC side when run on the vast majority [medium & low-end] of rigs in consumers homes).. Mods are about the only area where you point could have held if it weren't for the advent of console-internet-connectivity & what Epic are currently doing with UT3 on the PS3 pretty much make this a moot point also..

Granted in certain circumstances a PC game may not be able to carry over to the console platform in it's current form, since it was never designed to work with such a focused architecture (Crysis for example) however this doesn't mean all games will suffer from these issues..

Lastly your not even talknig about ports though, your talking about franchises which could consist of games from a plethora of genres (a la Starcraft Ghost & Halo Wars..) which don't necessarily have to remain consistent with the rest of the titles in the series. There is absolutely no reason why a game like Starcraft Ghost, done by one of Blizzard's (talented) internal teams couldn't sustain the same level of quality with respect to storytelling, polish, rich gameplay & attention to detail on a console as the original Starcraft has shown on the PC since such concepts are high level and thus ubiquitous across whatever hardware platform one would choose to develop on..

The gamepad is extremely limiting to a large number of genres. Even, arguably, the most popular genre in FPS is massively held back by the gamepad. You make sacrifices for it.

Your point about the PS3 and UT3 might be interesting, but we'll have to wait and see how that turns out. When I say mod I don't mean a new map or even slight tweaks, I mean entire conversions.

Lastly, as a platform for gaming the console is inferior in potential to the PC(you can't argue that, it is FACT, there is nothing a console can do that a PC cannot and there are things a PC can do that a console cannot). Many stock games never come to that potential but a number of mods have, and at the end of the day besides World of Warcraft my biggest gaming time has gone to mods and not stock games. It might come across as elitist but I'm not concerned about that, I know what I enjoy and that's boundless gaming which the PC platform offers.

This is likely very off topic though, since its more about my fears of this merger than the actual merger.

 

[ERP]

I really hope this doesn't adversely affect the way Blizzard operates, they've had the luxury to operate without significant financial pressure to ship titles, I don't see that continuing when you fold them into Activision.

Having said that any significant adverse effect probably won't be apparent for two or three years.

 

[archangelmorph]

The gamepad is extremely limiting to a large number of genres. Even, arguably, the most popular genre in FPS is massively held back by the gamepad. You make sacrifices for it.

Sure if you're porting!

Otherwise you don't.. Instead you Design for it.. Halo 3 being the perfect example of a slower paced gamepad-friendly FPS.. Not to mention the fact that that particular IP has probably sold more than any other FPS to date..

Your point about the PS3 and UT3 might be interesting, but we'll have to wait and see how that turns out. When I say mod I don't mean a new map or even slight tweaks, I mean entire conversions.

If you follow the UT thread in the games forum there's a link to an interview where he states specifically that the PS3 version of the game will be just as open as the PC version and also support complete & total conversions..

Lastly, as a platform for gaming the console is inferior in potential to the PC(you can't argue that, it is FACT, there is nothing a console can do that a PC cannot and there are things a PC can do that a console cannot).

Sure there are, you just have to read between the lines..:-

- Consoles provide a standardized hardware platform which allows developers to fully exploit the intricacies of the hardware at a much lower level than what Pc can do purely because on the PC you have to remain hardware ubiquitous & due to the restrictive nature of your graphics interface (OpenGL, DirectX etc..) you couldn't (practically) get any lower even if you wanted to..

- Consoles can allow you to game adaquately in the comfort of your sofa, sat a good distance away from your TV (argueable but generally true..)

- Consoles can provide high end performance hardware & high end, cutting edge software to the mass market consumer at mass market prices..

- Consoles provide better anti piracy measures.. (not so good for the consumer, but great for content providers whom, if you want them to keep developing the games you'd better make sure their best interests are preserved..)

I could dig up more but I think i've made my point..

Many stock games never come to that potential but a number of mods have, and at the end of the day besides World of Warcraft my biggest gaming time has gone to mods and not stock games. It might come across as elitist but I'm not concerned about that, I know what I enjoy and that's boundless gaming which the PC platform offers.

Well if your so-called stock games never live up to your expectations then why do you care about Blizzard's IP so much?

You obviously prefer playing content that they didn't provide (mods) over the ones that they did!

This is likely very off topic though, since its more about my fears of this merger than the actual merger.

Well I'm not particularly convinced such a merger will affect Blizzard in any regard as, from the sounds of things, Blizzard seems to be more in the driving seat than anyone else.. *shrug*