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The Impact of Activision Blizzard
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The Impact of Activision Blizzard

June 9, 2008 Article Start Previous Page 2 of 4 Next

Key Points and Further Developments

Since the announcement there have been several developments, some related directly to Activision or Vivendi pre-merger finalization and some with the prospective Activision Blizzard:

"Activision Blizzard" won't be used as a brand

Actiblizzard, Blizzavision -- we've all had fun coming up with daft names for the new company, but Activision Blizzard, though it's likely to stay the company's name on the stock market (as "Blizzard" gives it some star power) isn't expected to be the "consumer facing" brand for any titles from the future company. So, for example, World of Warcraft titles will still only say "Blizzard" on the box, as CEO Mike Morhaime told 1UP shortly after the merger was made public.

Activision were #1 publisher in the fourth quarter 2007

According to NPD data, Activision were the #1 publisher for console, handheld, and PC games in the United States, based on sales, and they saw a 92 percent surge in annual revenue, with success related to Neversoft's Guitar Hero III: Legends of Rock and Infinity Ward's Call of Duty 4: Modern Warfare (according to various tracking firms respectively the #1 and #2 best-selling titles in the United States and Europe during fiscal year 2008).

Activision have revealed their upcoming titles to include Guitar Hero IV, Call of Duty 5

As part of the announcement, Activision noted upcoming titles would include Guitar Hero IV, Call of Duty 5, James Bond, new Tony Hawks, Dreamworks, and Marvel titles, plus an "entry into racing with Bizarre [Creations]." Vivendi titles, other than the key World of Warcraft franchise, have not been as visible.

Vivendi Games saw sales fall 24% due to a wait for the next WoW expansion

Vivendi's first quarter 2008 results showed a 24 drop over the previous year (which saw the release of The Burning Crusade) but Blizzard still performed strongly - with sales of €192 million ($296.6 million) and the addition of two million more subscribers, taking it to 10.7 million. This further affirms Vivendi's reliance on Blizzard.

Activision have been sued by a group of investors over the merger

The Wayne County Employees' Retirement System has filed a complaint in Delaware Chancery Court, in Wilmington claiming that Vivendi's 52 percent ownership of the combined Activision Blizzard company disadvantages Activision shareholders.

It is currently unknown if this has caused any delay in the merger, and although Activision is expected to be the "dominant partner" with CEO Bobby Kotick transferring to the main seat of power at Activision Blizzard, it's unlikely to relate to the issue of shareholders being disadvantaged.

Sierra Games have to be pitched to Activision?

One of Vivendi's labels, Sierra, now has to 'essentially' pitch all of its upcoming titles to Activision executives, according to an article from Variety. This report was backed up off the record by developers in conversation with Gamasutra, which further implies that Activision is the dominant partner.

Bobby Kotick sure likes to talk

Activision's CEO and soon-to-be Activision Blizzard CEO has talked a lot about the future of Activision and Activision Blizzard, fuelling speculation and discussion of the company to fever pitch. His often headline grabbing statements include:

  • Claiming the merger was entirely about getting their hands on Blizzard: "The merger was really our mechanism to get access to Blizzard's talent, Blizzard's capability, their infrastructure, from the multiplayer matchup standpoint, from a multiplayer gaming standpoint, but also in areas we would never have had an opportunity to participate."
  • Suggestions that they may explore additional monetization methods for WoW: "The business has grown so much... that [Blizzard], like us, have tried to prioritize opportunity, and that probably has been at the expense of expanding [average revenue per user] to the few million hardcore, rabid hobbyist enthusiast World of Warcraft fans who would pay substantially more than probably what they're paying today for enhanced services like character transfers."
  • Using Blizzard to push Activision franchises in Asia: "There was 'no greater resource' than Blizzard to help the company push franchises like Guitar Hero into Asian markets."
  • A possible Call of Duty MMO: "Speaking at the Morgan Stanley Technology Conference in California, Activision CEO Bobby Kotick has raised the possibility of a massively multiplayer online (MMO) Call Of Duty game"...
  • But also claiming that MMOs could be an "insurmountable product category": "We don't think that even if we made the USD 500 million or billion-dollar investment to get a product out [to compete with WoW] that we would even be successful doing it."

Article Start Previous Page 2 of 4 Next

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