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Activision-Blizzard: new No. 1 Games Publisher
Activision-Blizzard: new No. 1 Games Publisher
Today, Vivendi and Activision have announced the largest merger in Gaming history, which dwarfs the acquisition of BioWare/Pandemic by Electronic Arts (for up to 860 million dollars) on October 12th 2007. The deal cleverly minimizes the amount of cash that needs to change hands (see below), but would value the total company at around 18.8 billion dollars. "We will form the world's most profitable games business", the announcement says in a nutshell. You can find extensive coverage of the merger on the newly launched official website www.activisionblizzard.com.
The new company's name will be Activision Blizzard -- which feels kind of strange, because Blizzard is only one of many fully owned subsidiaries of Vivendi. But, obviously, with 9 million subscribers worldwide for World of WarCraft, Vivendi (which will end up as the majority owner of Activision Blizzard with around 68% of the shares) deemed that name the best one. Blizzard also has made an announcement on their homepage.
The combined game franchises include, among many others, WoW, Guitar Hero, StarCraft, Call of Duty, Crash Bandicoot, F.E.A.R., World in Conflict, Tony Hawk's Skating and Spyro the Dragon.
For those of you interested in a quick overview of the financial details, this is a clever transaction in which Vivendi acquires a majority stake in the combined entity of Activision Blizzard, through a series of financial maneuvers. First, Vivendi will spin off Vivendi Games and Activision will acquire Vivendi Games by issuing 295.3 million shares of common stock. Vivendi will purchase 62.9 million newly issued Activision shares at $27.50 per share (a premium to Activision’s recent trading price) for $1.7 billion. At this point, Vivendi should own around 52% of the combined entity
Within five business days of all that, Activision Blizzard (the new company) will offer to purchase up to 146.5 million shares of Activision Blizzard at $27.50 per share through the public markets (spending up to $4 billion). Vivendi will purchase another $700 million of the common stock at this point. At the end of this step, shortly after the entities are merged, Vivendi should own around 68% of Activision Blizzard. Vivendi will have only had to pay $2.4 billion, and Activision Blizzard will have spent its cash on hand to repurchase shares (possibly borrowing more to complete the offer to purchase shares.)
The CEO of the new company will be the current Activision CEO, Bobby Kotick. Bruce Hack, the current CEO of Vivendi Games will become the Vice Chairman and Chief Corporate Officer of Activision Blizzard. Mike Griffith will run Activision Publishing (which will then include the Sierra Entertainment, Sierra Online and Vivendi Games labels). Mike Morhaime will continue to run Blizzard Entertainment.
Vivendi and Activision expect that the merger will be completed in the first six months of 2008, assuming that they get the approval of shareholders and regulators.
What do You think: Is this merger a positive event, finally putting Electronic Arts in the second place? Or do you think that some of the franchises of Activision and Vivendi might not survive the merger?
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*sigh*
Why should EA change something ? There's still lots of
idiotscustomers out there who will buy "The Sims2: Retirement Castle Addon" or the 200th (or something) version of NHL, NBA or the biggest disappointment of all: Need for Speed in it's latest version Pro Street. There is still a lot of money to be made by producing sequel after sequel after sequel ...As for Activision Blizzard (pretty dumb name in my opinion):
Seriously hope that they won't go on the same course as EA has done - just don't like to see any numbered sequels or games that "are planned as a trilogy" with their cliffhanger endings. Why sell one game if you can make people buy 3 of them ?
Maybe I'm just a bit disappointed of such games because Assassin's Creed came close to being the first game that made me throw my 360 controller towards my tv - because of it's ending that screams cliffhanger at me.
It always adds efficiency and quality if a company grows insanely big ... or was that the other way around!? Anyway, hooray Actalizzard!
I really like Acta-Lizzard, you should suggest that name to them :-)
Oooh c'mon! Activision-Blizzard, seriously !?!?!? Sounds like a stupid action hero -.-
Pff, well let's see how it goes. If they don't forget the Blizzard franchises, I'll be ok with it.
Why should they forget the Blizzard stuff? Blizzard's WoW (and StarCraft, which is also strong in Asia, I presume) is the main reason for the merger in the first place.
Of course they won't forget Warcraft and Starcraft had just a new instance but what's with Diablo?
ActiBlizz sounds like you could clean your kitchen with it or something - but seriously, I think to include "Blizzard" as the probably best-known brand name of both companies was a wise decision.
Concerning future developments - we'll see. I don't think the usual complaints about firms becoming too big make a lot of sense here. It's eventually obvious that gaming business is big business, too.
Great! Another superpower. In 2 years, we might see only 5 or 6 remaining publishers, including Microsoft, Sony and the big N, and we will see prices soar and quality dwindle. This is not a big publisher eating a small one or buying a developer, it's two of the largest publishers around! I do not like this at all.
I have at least mixed feelings. In my experience, whenever there is a merger, something is lost. Suddenly, there are redundancies in the personnel or in the games lineup. Series that were doing good, but not great, might be discontinued. When two companies, for example, each have a real time strategy franchise, it's not very likely that both will be continued. Which is bad, because it lowers competition and limits choice.
Activision would have been the nicer name.
Agreed.
The companies say that they will focus on:
The last three of those points all suggest that they will be trimming the old Vivendi Games business and firing old Vivendi Games staff. The company stated that it expects “Total headcount will be approximately 5,800 employees with a combined product development workforce of over 3,000 people.” Has anyone found the total number of employees at both companies currently?
Hi Kyle, thanks for enhancing the news with the financial infos (and streamlining some sentences)!
Of course!
i don´t know, i don´t think it´s such a bad thing that those two merged. as long as blizzard keeps its special position and can develope games as they like, everythings fine. don´t play too much pc anyway, for the quality of games gets lower and lower and only a few examples show the opposite (like recently crysis). i still think that the pc can be the best platform, but right at the moment i like my wii more. but if a new blizzard game or anything likely good gets released, i´ll buy it. small companies are an endangered species anyway; let´s just hope that vivendi and activision stay close to their game series
"small companies are an endangered species" -- the same was said (I am sure) in the movie industry about small film studios. But although there are the big Hollywood supertankers, of course, the creative people tend to form small studios or work on a by-project-base. More and more, movies get funded by fonds and VC companies. And with digital distribution coming up, maybe it's the big publishers that are endangered, on a timescale of 5 or 10 years? Just my two cents...
You seem like you've seen Richard Stallman's speech.
If you haven't, tell me, I'll give you the link, you will like it.
I haven't, feel free to give me the link.