Posted in ajewsbcb

Video-game makers’ merger plays to strengths

first_imgVivendi’s planned acquisition of Activision would blend each company’s respective strength but won’t necessarily lead to the sharing of ideas and concepts among the game developers. Activision Inc., whose shares rose nearly 13 percent on the news, is strong in console games, with titles that include the music game “Guitar Hero III,” the combat game “Call of Duty 4” and skateboarding games starring Tony Hawk. Vivendi SA’s Blizzard Entertainment Inc. leads the market for subscription-based online video games with the widely popular “World of Warcraft” series. “It’s a way to sort of have all their bases covered,” said Jeff Green, editor-in-chief of Games for Windows: The Official Magazine. “I don’t think this means Tony Hawk is going to show up in World of Warcraft. Everything is going to go along as it had been. Paris-based Vivendi SA and Santa Monica-based Activision Inc. said Sunday that their respective board members had approved a plan to combine Activision with the French company’s game unit, Vivendi Games, which includes Blizzard and three other divisions. “It’s no longer that you can just go out on one platform and be a one-trick pony,” Cole said. “With the costs of development and distribution, you’ve got to really have international scale.” Cole said it remains to be seen if the transaction will signal future consolidation from large media companies seeking to cash in on gaming’s growing popularity. Blizzard officials said the deal would not affect upcoming titles such as a “Warcraft” expansion pack called “Wrath of the Lich King,” or the highly anticipated “StarCraft 2,” both due sometime in 2008. Activision said it is already planning new versions of current hits “Guitar Hero” and “Call of Duty.” Colin Sebastian, an analyst at Lazard Capital Markets, called the deal a “very good fit” because the two companies complement each other. Key is the addition of “World of Warcraft” to the Activision family. Launched in 2004, the persistent online fantasy world has mushroomed to 9.3 million subscribers worldwide, each paying up to $15 a month to battle mythical monsters for treasure and other rewards. Calling the new company Activision Blizzard instead of Activision Vivendi is a clear acknowledgment of the importance “Warcraft” brings to the mix, Green said. Thill said Activision would be less tied to the unpredictable highs and lows of console games. Now each time a new wave of consoles hits the market, game publishers are forced to decide which system will come out on top, without even knowing which one consumers will ultimately snap up the most.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREPettersson scores another winner, Canucks beat KingsThe transaction is expected to close in the first half of 2008 pending shareholder and government approval. The two companies are behind some of the most popular and critically acclaimed video games of all time. The deal would create an $18.9 billion electronic entertainment juggernaut,” rivaling the world’s current No. 1 publisher, Electronic Arts Inc., in terms of the variety and types of games it would offer worldwide. Citi Investment Research analyst Brent Thill said he doesn’t expect Electronic Arts or other gamemakers to feel too threatened. Electronic Arts has plenty of strong offerings such as games based on “The Sims” series, he said. David Cole, president of DFC Intelligence, said the deal shows how the $40 billion, global video-game industry is changing from a packaged-goods business that makes, sells and distributes boxed video games to a service business that delivers online PC games such as “Warcraft.” last_img read more

Continue Reading... Video-game makers’ merger plays to strengths