Of course, what’s merger Monday without the blockbuster game publishing deal of the century? As widely reported Vivendi Games and Activision are combining forces to create the “world largest and most profitable pure-play video game publisher”.
You can find a Fact Sheet from Activision’s web site here. There’s more fluff on Blizzards FAQ here. Lots of commentary floating around in the business press and in the game world. Mike Morhaime (CEO of Blizzard) did a Q&A with Gamespot/CNET which is worth a quick browse. Note the quick sidestep about Sierra Entertainment.
Way too much to think about when you have a deal of this size and scope, but a couple of thoughts. Interesting to see which strategy ultimately pays off– Activision Blizzard is trying to go horizontal across PC, Console and Online games v. SoE’s vertical strategy of integrating many online games under one roof.
Say what you will about SoE, but at least they are focused on the online game experience and seemed poised to remain a major pipeline through which online game content will flow. There is something to be said about keeping all the subscription income under one roof. SoE seems to understand that its important to create and maintain sticky relationships with subscribers.
Activision Blizzard really has only one MMO (albeit a monster) to its credit. Otherwise there will be a lot of PC and Console game DNA in the combined company. That business is all about selling boxes which is something that Blizzard actually knows quite a bit about having made 4 of the 5 best selling PC games of all time. I’m not sure whether this a good thing or a bad thing. With such breadth, I’m worried that the PC/Console mantra of “sell something, anything, to everyone” will ultimately dilute Blizzard’s primary focus which has always been “sell everyone our one great thing.”
No doubt this looks like the right business move based on the Activision FAQ, but I’m always pessimistic since studies show that quite often mergers neither result in better shareholder results or better products for consumers, particularly in a “merger of equals” (cough AOL/Time Warner; Daimler Chrysler, etc. cough). Despite the press and spin floating around now, it will be interesting to read the information Activision will put in its shareholder proxy statement for the special meeting to approve the merger by Activision shareholders. It will be filing that shortly with the SEC and all the gory and yes, perhaps, boring details will be disclosed in the filing. That’s the document companies get sued about, so it should be a decent read– especially the background of the merger section to see how and when the deal came to be.