Watch Your Back EA, Activision Blizzard is Coming For You…

by Wade Larson on December 4, 2007 at 12:03 pm

…Epic Dagger in One Hand and M16 in the Other

With the merger of two of the biggest and most successful gaming companies in the world, the playing field is about to shift. Activision (think Guitar Hero, Call of Duty 4 and Tony Hawk) and Vivendi (owners of Blizzard, i.e. World of Warcraft) have joined forces, and the $18.9 billion deal will create some serious competition for the #1 position as third party publisher.

For gamers, it means some legendary talent coming together under one parent company. For stockholders, it means a whole lotta cash. In the official press release and a blog interview with Vivendi CEO Jean-Bernard Levy, Activision CEO Bobby Kotick, Blizzard CEO Mike Morhaime, Vivendi Games chairman René Penisson, and Activision CFO Thomas Tippl, the executives of both companies stressed the combination of quality games and how ridiculously rich they’re all going to get.

Let there be no doubt, this is a business venture. They may talk about how they have synergy or parallel interests, but it all comes down to the bottom line. And the bottom line is looking damn fine.

Blizzard is practically printing money from hordes (and alliances) of Warcrack addicted fans. (I’ve been clean 4 months… well, ok 2. But it was just one level in October, I swear!) Call of Duty 4 is racking in accolades and Guitar Hero is rocking the market. So when you combine all these, its no wonder Vivendi CEO Jean-Bernard Levy said,

“This transaction makes clear financial sense.”

$18.9 trillion cents.

And while the companies will likely be making more than the U.S. mints, it’s important not to forget about the games. These are two companies with proven track records of gaming excellence; their merger looks to be a win/win situation for everyone (except for EA, of course.)

But perhaps Activision CEO Bobby Kotick summarized the benefits of the merger best in an interview with Newsweek when he said of Blizzard:

“This is a company that’s going to generate $500 million of operating income this year. They’re a big fish from two perspectives. One, from a financial perspective, but more importantly, probably, for our company, from a creative perspective. They are generally regarded as one of the best development studio publisher businesses in all of videogames.”

On the heels of the announcement, stocks went up for both companies, but according to Reuters, stocks also went up for rivals Ubisoft Entertainment and Infogrames Entertainment. So this announcement caused ripples of economic confidence through the industry.

Of course the companies are out to make money, and they have to convince shareholders that this investment will pay off. But for gamers, the real question comes down to the number of highly respected developers involved. Will they continue to produce great titles? I see no reason why not. If anything, this merger gives the studios involved more financial backing to build on existing franchises and hopefully produce some new ones.

If the company heads continue to give developers the freedom to make high quality titles they’re known for, this merger may prove to be a huge win for gamers.

Source: Newsweek Reuters

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