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TEXT ONE
The bride and groom, a guitar-wielding rock vixen and a muscle-rippling dragon-slayer, make an odd couple so it is hardly surprising that nobody expected their marriage. But on December 2nd the video-game companies behind Guitar Hero and World of Warcraft , Activision and Vivendi Games respectively, announced plans for an elaborate merger. Vivendi, a French media group, will pool its games unit, plus $1.7 billion in cash, with Activision; the combined entity will then offer to buy back shares from Activision shareholders, raising Vivendis stake in the resulting firm to as much as 68%.
Activisions boss, Bobby Kotick, will remain at the helm of the new company, to be known as Activision Blizzard in recognition of Vivendis main gaming asset: its subsidiary Blizzard Entertainment, the firm behind World of Warcraft , an online swords-and-sorcery game with 9.3m subscribers. The deal was unexpected, but makes excellent strategic sense, says Piers Harding-Rolls of Screen Digest, a consultancy. Activision has long coveted World of Warcraft , and Vivendi gets a bigger games division and Activisions talented management team to run it. As well as making sense for both parties, the $18.9 billion deal the biggest ever in the video-games industry says a lot about the trends now shaping the business.
The first is a push into new markets, especially online multiplayer games, which are particularly popular in Asia, and casual games that appeal to people who do not regard themselves as gamers. World of Warcraft is the worlds most popular online subscription-based game and is hugely lucrative. Blizzard will have revenues of $1.1 billion this year and operating profits of $520m. World of Warcraft is really a social network with many entertainment components, says Mr Kotick.
TEXT ONE
The bride and groom, a guitar-wielding rock vixen and a muscle-rippling dragon-slayer, make an odd couple so it is hardly surprising that nobody expected their marriage. But on December 2nd the video-game companies behind Guitar Hero and World of Warcraft , Activision and Vivendi Games respectively, announced plans for an elaborate merger. Vivendi, a French media group, will pool its games unit, plus $1.7 billion in cash, with Activision; the combined entity will then offer to buy back shares from Activision shareholders, raising Vivendis stake in the resulting firm to as much as 68%.
Activisions boss, Bobby Kotick, will remain at the helm of the new company, to be known as Activision Blizzard in recognition of Vivendis main gaming asset: its subsidiary Blizzard Entertainment, the firm behind World of Warcraft , an online swords-and-sorcery game with 9.3m subscribers. The deal was unexpected, but makes excellent strategic sense, says Piers Harding-Rolls of Screen Digest, a consultancy. Activision has long coveted World of Warcraft , and Vivendi gets a bigger games division and Activisions talented management team to run it. As well as making sense for both parties, the $18.9 billion deal the biggest ever in the video-games industry says a lot about the trends now shaping the business.
The first is a push into new markets, especially online multiplayer games, which are particularly popular in Asia, and casual games that appeal to people who do not regard themselves as gamers. World of Warcraft is the worlds most popular online subscription-based game and is hugely lucrative. Blizzard will have revenues of $1.1 billion this year and operating profits of $520m. World of Warcraft is really a social network with many entertainment components, says Mr Kotick.
