The World of MergeCraft games in the making

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Dec 03 2007
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Computer gamers out there should know who’s Blizzard Entertainment. No? Then games such as “World of Warcraft” and “Diablo” might ring the bell. Of all the games I’d played my favorite was easily Diablo II – thereafter you saw some other games built within the same story-line or concept as Diablo. It appears the corporate M&A has hit the gaming sector with the latest announcement that Vivendi SA is set to acquire a controlling stake in Activision Inc. and combine the company with Vivendi Games in a deal that would create a rival to Electronic Arts Inc. as the world’s largest video game publisher.

French conglomerate Vivendi would pay $27.50 a share and make cash infusion of $1.7 billion to acquire a 52 percent stake in Activision Inc. (Nasdaq: ATVI, stock), valuing the combined company at $18.9 billion. Vivendi will then fold its game operations into those of Activision in the new company. Vivendi’s Irvine, California-based Blizzard Entertainment is behind the top multiplayer online role-playing game franchise, “World of Warcraft.” which the company says more than 9.3 million subscribers worldwide. Activision Blizzard will continue to operate as a public company traded on the Nasdaq Stock Market under the ticker ATVI.

Vivendi Activision MergerActivision’s forte is on making games for consoles, like the Sony’s (NYSE: SNE, stock) PlayStation 3 and the Microsoft Corp.’s (Nasdaq: MSFT, stock) Xbox 360. Its game franchises include “Call of Duty” war game series and “Guitar Hero” (Guitar Hero III sold 1.3 million copies in just seven days after released). Vivendi’s strength is in online games (like World of Warcraft and Diablo), which its Blizzard Entertainment unit has built into a worldwide phenomenon with more than nine million players worldwide.

Sales at Activision rose to $1.5 billion in 2007, a 74 percent jump from 2003. In the same period, Electronic Arts’ revenue rose 25 percent, to $3.1 billion. Vivendi and Activision estimated their combined revenue for 2007 at $3.8 billion.

Robert A. Kotick, the chief executive of Activision will retain his position atop the combined company while Bruce Hack, chief executive of Vivendi Games, will become vice chairman and chief corporate officer.

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