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Activision Blizzard to create "world's largest, most profitable" videogame publisher

Activision and Vivendi Games announced on Sunday a merger of the two companies to form Activision Blizzard. The latter half of the company name obviously comes from Blizzard Entertainment, developers of the wildly popular Warcraft, StarCraft and Diablo franchises, a division of Vivendi Games.

With the combined forces of Activision and Vivendi, Activision Blizzard is expected to have approximately $3.8 billion in pro forma combined calendar 2007, potentially overtaking EA with the highest operating margins of any major third-party video game publisher.

Under the terms of the merger, shares of Vivendi Games will be converted into 295.3 million new shares of Activision common stock. Vivendi will also purchase 62.9 million newly issued shares of Activision common stock at a price of $27.50 per share for a total of $1.7 billion in cash. As a result of these transactions, Vivendi will own an approximate 52 percent ownership stake in Activision Blizzard on a fully diluted basis.

Shortly following the closing transaction, the newly formed company will launch a $4 billion all-cash tender offer to purchase up to 146.5 million Activision Blizzard common shares funded by the company’s cash on hand at closing, including the $1.7 billion in cash received from the Vivendi share purchase. Vivendi will also acquire from Activision Blizzard additional newly issued shares for up to an additional $700 million of Activision common stock at $27.50 per share. The proceeds would also be used to fund the tender offer, which could lead Vivendi to own an approximate 68 percent stake in Activision Blizzard on a fully diluted basis.

Current Activision boss Robert Kotick will be the president and CEO of Activision Blizzard, while Vivendi CEO Bruce Hack will serve as vice-chairman and COO of Activision Blizzard. Mike Griffith will oversee Activision Publishing, which after closing will include the Sierra Entertainment, Sierra Online and Vivendi Games Mobile divisions. Mike Morhaime will remain at his position as president and CEO of Blizzard Entertainment.

“This alliance is a major strategic step for Vivendi and is another illustration of our drive to extend our presence in the entertainment sector,” said Jean-Bernard Levy, CEO of Vivendi. “By combining Vivendi's games business with Activision, we are creating a worldwide leader in a high-growth industry. We are excited about the opportunities for Activision Blizzard as a broader entertainment software platform.”

Activision CEO Robert Kotick added, “By combining leaders in mass-market entertainment and subscription-based online games, Activision Blizzard will be the only publisher with leading market positions across all categories of the rapidly growing interactive entertainment software industry and reach the broadest possible audiences. By joining forces with Vivendi Games, we will become the immediate leader in the highly profitable online games business and gain a large footprint in the rapidly growing Asian markets, including China and Korea, while maintaining our leading operating performance across North America and Europe.”

Mike Morhaime took the announcement as another opportunity to boast of the World of Warcraft’s unflappable popularity. “Blizzard's industry-leading PC games business, with a track record of nine consecutive bestsellers and a global subscriber base of more than 9.3 million World of Warcraft players, is an exceptional fit for Activision's highly profitable console games business,” said Morhaime.

Blizzard Entertainment updated its official website with a page of answers to frequently asked questions, mostly detailing how Blizzard will continue to operate as it did prior to the merger. Blizzard assured fans that the transaction would have no affect on the development of future products such as Wrath of the Lich King and StarCraft II.

The videogame industry also appears to be at a stage where several large corporations are swallowing developers in an effort to achieve industry domination. In October, EA purchased both Pandemic Studios and BioWare in a deal worth $860 million. Microsoft purchased high-profile developers Rare and Bungie in the days of the original Xbox, though Bungie regained its independence this year. With Vivendi and Activision hitched, the last major videogame powers yet to consolidate into a larger body appear to be Ubisoft and Take-Two Interactive.

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WoW on PS3 & Xbox 360?
By gumbi18 on 12/3/2007 7:52:28 AM , Rating: 2
quote:
Blizzard's industry-leading PC games business, with a track record of nine consecutive bestsellers and a global subscriber base of more than 9.3 million World of Warcraft players, is an exceptional fit for Activision's highly profitable console games business,” said Morhaime


If that doesn't mean that the WoW juggernaut is coming to PS3 and Xbox 360, than I'm a monkey's uncle. I also wonder how this effects Blizzard's development on the enigmatic "3" project?




RE: WoW on PS3 & Xbox 360?
By Aikouka on 12/3/2007 8:38:54 AM , Rating: 2
To me it just means that Blizzard's high-profile PC games + Activision's console games = full-spectrum domination. Blizzard has said many times that WoW will never be ported to the consoles, and I doubt that it will end up there. Their reasoning being that it's simply too much work when WoW doesn't require a great PC to run anyway.


RE: WoW on PS3 & Xbox 360?
By Etsp on 12/3/2007 9:09:54 AM , Rating: 2
I thought their reasoning was that WoW is designed to require a keyboard and mouse combo, and porting it over to a controller would make a player much much less effective... Of course, they could always require keyboard and mouse...

It's probably a combination of the two, it would be harder to write a patch for 5 different platforms than it would be to write one for just two like it is currently (PC and Mac) and then they would require the extra cost of a keyboard and mouse thats compatable with the system.


RE: WoW on PS3 & Xbox 360?
By ZaethDekar on 12/3/2007 9:33:09 AM , Rating: 3
The Wii.

It can already use a USB keyboard, and you already have the 'mouse' as the wiimote. I am sure it can handle the graphics even if its on 'low' settings.


RE: WoW on PS3 & Xbox 360?
By Murst on 12/3/2007 10:19:13 AM , Rating: 2
Out of all the current-gen consoles, the Wii is perhaps the ONLY one that theoretically couldn't support WoW. It has nothing to do w/ the graphics, but everything to do with the hard drive, which does not exist on the Wii console.


RE: WoW on PS3 & Xbox 360?
By afkrotch on 12/3/2007 12:05:07 PM , Rating: 2
PS3 can use a keyboard and mouse, while Xbox 360 can use a keyboard. At any time Microsoft can just do an update and make the Xbox 360 support a mouse.

Plus you'll have the power to backup HD resolution. Course can't think of anyone that has their console connected up in a PC like configuration anyways.


RE: WoW on PS3 & Xbox 360?
By Schadenfroh on 12/3/2007 1:06:39 PM , Rating: 2
The PS3 works fine with normal PC USB keyboards / mice.


RE: WoW on PS3 & Xbox 360?
By aharris on 12/3/2007 1:20:18 PM , Rating: 2
Good to hear. Last I heard mouse/kb combos weren't viable on consoles. Guess I'll look into this further.


RE: WoW on PS3 & Xbox 360?
By SirLucius on 12/3/2007 2:31:12 PM , Rating: 2
UT3 is going to be keyboard/mouse compatible when it hits the PS3. Hopefully more developers will start supporting keyboard/mouse controls for the system.


RE: WoW on PS3 & Xbox 360?
By Sulphademus on 12/4/2007 4:14:56 PM , Rating: 2
So how am I going to bind my 800 buttons on to an Xbox or PS3 controller? I already use over half the keyboard and everything the mouse has to offer!


RE: WoW on PS3 & Xbox 360?
By KernD on 12/3/2007 12:34:53 PM , Rating: 2
This merger is all about complementing each other, like you said.
Blizzard is great for PC games, but failed in consoles. (SC Ghost)
Activision is doing great on consoles but has only 1 good PC franchise (Call Of Duty).

Blizzard will remain intact, they won't realy be absorbed in Activision Blizzard, they keep the same CEO. The Activision CEO won't control blizzard at all, but he will oversee all other Vivendi studios.
The only thing that will probably change for them is the name of Vivendi behind the box will become Activision Blizzard, Activision and Vivendi wan't Blizzard to stay great, they won't toutch them.


RE: WoW on PS3 & Xbox 360?
By Alexstarfire on 12/3/2007 1:30:54 PM , Rating: 2
That doesn't make sense that the Activision CEO would do anything since it states that Vivendi will own majority of the company.

As long as Blizzard is left to do it's own thing then the gaming world will survive.

It seems that everything in games is gonna be owned by 3 companies: EA, Microsoft, or Activision Blizzard.


RE: WoW on PS3 & Xbox 360?
By aharris on 12/3/2007 12:57:58 PM , Rating: 2
Active WoW player. Part of the merger agreement is that Activision cannot touch World of Warcraft with a ten-foot-pole. I have yet to see evidence, but another WoW player mentioned that the clause was in bold type in the contract.

Above poster is correct in that you can't play WoW without a mouse/keyboard combo, and we've seen attempts at console mouse/keyboards fail in the past. Interactivity is a must in WoW. Most of us who currently enjoys end-game content would refuse to bring along someone who is restricted by clumsy joysticks and a lack of keys for macros/combos etc. And yes, joysticks are clumsy compared to a mouse/keyboard.

Blizz also will not dedicate more of their resources to updating 3 more platforms. They're currently working on another MMO, Starcraft II, Wrath of the Lich King (2nd exp. pack for WoW), and they update WoW content on a monthly basis with patches and new material. Developing a 3 year old platform to support current consoles would take too much away from future profitability.

It'd be great to see the player base grow from what it is (in some senses), but part of Blizzard's original goal was to make the game fun and accessible to everyone. One of the reasons for ports from PCs to consoles is to provide users with easy access to high hardware requirements, but WoW can already be played on some pretty basic hardware. That said, I'm not sure "access to new player base" really has a justification. Maybe with the 'console gaming is sooo much better than PC gaming' crowd, but quite frankly we don't want them playing along-side us.

I could be wrong on this, but I think Blizzard would be scrutinized to much by its current player base too much to be able to pull this off. When it comes to community, only Dynamix has had more participation. Sierra suffered dearly when they didn't listen to their fans about major changes.


RE: WoW on PS3 & Xbox 360?
By Hase0 on 12/3/2007 4:34:14 PM , Rating: 2
you can get an xfire addon that lets you use a 360 controller to play wow, think its called switch blade
found here http://www.switchbladegaming.com/

Heres a review of it to from kotaku
http://kotaku.com/gaming/in-control/play-wow-with-...

I havent tried it yet(too lazy to get my controllers from my other house) but i wouldnt think it be too hard to play wow the same on a console, might be harder for some classes though. obviously people using keyboard/mouse would have a greater advantage over people using controllers, but they could fix that by adding a realm that lets only people with controllers play, maybe allowing the option to use that character on one of each pc and console realms. I do agree that you well most likely never see it on a console, but you can still play it like a console to a certain degree.


RE: WoW on PS3 & Xbox 360?
By Sulphademus on 12/4/2007 4:22:36 PM , Rating: 2
quote:
Part of the merger agreement is that Activision cannot touch World of Warcraft with a ten-foot-pole.


If you assume everyone is paying $15US/Month (cause I dont know what it costs in China, and Pounds, Loonies, and Euros are always floating with the dollar), with 9.3 million monthly subscribers, thats $2.2 billion annually.

Clause or not and even with fluxtuating exchange rates, you dont #$%& with that!!!


RE: WoW on PS3 & Xbox 360?
By slickr on 12/3/2007 6:08:52 PM , Rating: 2
Great news i guess if Blizzard really stays intact, which i have every reason to believe it will.

Anyways this gives both companies a huge boost in profit and makes it one of the biggest or even the biggest game development/publisher in the world.

Activision has the console market and north America, Blizzard has the PC market and Asia.
WC3 is very popular is China, WOW is popular everywhere and starcraft 2 will be popular everywhere, especially North Korea.

So as long as nothing major changes then it will be better for end users and developers alike.

As far as WOW porting to consoles that won't happen. RPG, RTS, adventure games are really hard to port to a joystick and further more Blizzard have their hands full on 3 games as well as patching WOW.
They are developing wrath of the lich king, starcraft 2 and a third unnanounced MMO game.


They should just call it...
By Indiglo on 12/3/2007 6:26:55 AM , Rating: 5
... Blizzision and be done with it.




RE: They should just call it...
By killerroach on 12/3/2007 8:29:57 AM , Rating: 6
I heard a suggestion from somebody else of "Actilizzard".


RE: They should just call it...
By AWeav09 on 12/3/2007 9:05:43 AM , Rating: 3
I definitely lol'd at that... it sounds like a superhero of some sort. "It's a bird! It's a plane! It's... Actilizzard!!!"