New #1 in electronic games
French media/telecom conglomerate Vivendi announced it would buy US-based electronic game maker Activision. The deal is for a whopping $18.9 billion. Vivendi will combine Activision with its own Blizzard subsidiary, a game company whose major hit is the very popular role-playing game World of Warcraft. Activision's biggest franchises are Guitar Hero and Tony Hawk games.
The unified company, Activision Blizzard, will become the leading game maker, surpassing Electronic Arts. It will have revenues of $3.8 billion.
As the Financial Times article ("Vivendi in $18.9bn acquisition of Activision," 12/2/07) explains, this is a good deal for both companies. "Activision has lacked a successful online role-playing game and a major presence in Asia, which World of Warcraft provides, along with monthly recurring revenues from its members' subscriptions. Vivendi Games…has struggled to compete with pure-play publishers and the first-party console makers who publish games." The console maker oligopoly consists of Microsoft (Xbox), Sony (Playstation) and Nintendo (Wii).
Vivendi, which sold off many of its holdings (especially its water utility business) in 2003 after its post-Web boom disasters, almost sold off the game division. The viral success of World of Warcraft started soon after.
According to the Wall Street Journal ("Deal Set to Make Vivendi Big Player in Videogames", 12/3/07), the overall gaming industry, hardware and software, is experiencing record growth, at 18.5% this year, compared to the 3.8% rise in the movie business and the drop-off of 1.3% in music. In fact, gaming is set to surpass the gross revenues of the music business ($37 versus $35 billion). Vivendi has major holdings in movies and TV (Canal Plus and music (UMG).
10:06:22 PM 
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