Does ActiBlizsion Make Sense? Can A Merged Activision And Blizzard Really Work?

from the the-studio-model-at-work dept

The big news in the tech world this weekend, of course, is the slightly complicated merger between video game firms Blizzard and Activision to form the not-particularly-creatively-named Activision Blizzard. You can read the link above to figure out the complicated parts, including Vivendi’s role, as well as the various amounts of cash going into the deal from both sides. As for the rationale behind the deal, it’s one of those deals that seems to make sense on paper. It makes the combined company somewhere around the size of EA, the major player in the space. It also aligns the complementary strong points of each firm. Activision is big in console games like Guitar Hero while Blizzard is big in multi-player online games like World of Warcraft. Blizzard also has a strong presence in Asia. So, on paper, it sounds like a great deal. The tricky part will be actually making it work. Even with such clear complementary successes, it’s not always so easy to merge two large players like this with different approaches to the market. What almost always happens when two large companies merge is that one side ends up taking over and the other group fights for a while and then leaves — taking much of the reason for the merger away. Even more complicated in this case is that both companies are pretty dependent on coming up with new “big hits” on a regular basis to keep bringing in the revenue. EA’s success (whether on purpose or not) has largely been driven by the ability to release “franchise” games that people will buy the next version of every year — particularly in the sports arena. If the merger makes the company take its eye off the ball, leading to a weak set of products, it could be quite damaging. Maybe the companies will pull it off. Maybe they can figure out a way to actually build on their separate strengths without fighting themselves — but it’s a big bet to take.

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Companies: activision, blizzard, vivendi

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Comments on “Does ActiBlizsion Make Sense? Can A Merged Activision And Blizzard Really Work?”

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29 Comments
moe says:

Fark's got it's finger on the pulse

I think this headline from Fark.com says it all: “Activision and Blizzard to merge their creative juices, come up with the name Activision Blizzard. Creativity has its limits.”

It’ll be interesting to see how it works out, but just because you make a company of the same size doesn’t guarantee you’ll unseat EA. This merger brings together two companies that excel at two different types of games: Console & PC/MMORPG.

Sure, EA competes in both markets but it does so using the same titles! They just make the latest version of Football/Baseball/Golf/etc and then port it out to every gameplaying medium.

Unfortunately, neither of these companies competes very well with EA’s core business of sports games. So, the combined margins and profits might equal EA’s but they’re not going to hurt EA in any significant way. I don’t see this merger doing anything that each of the companies couldn’t have done on their own.

Shohat says:

Oh comeon

At least link to the
ActivisionBlizzard.com
Website.
There is a very detailed paper there that explains a lot of the reasons behind the merger, and states some key achievements of both companies.
Blizzard is a completely different type of company . They release one game every 2-3 years, but 4 out of 5 all-time bestselling games belong to Blizzard.
Over 9 million WoW users generate more than 100 million a month in revenue.
On a side note, Guitar Hero is owned by Activision and EMI is owned by Vivendi, which could be an another angle for this merger…

Nick Overstreet (profile) says:

Re: Oh comeon

4 out of 5 all-time bestselling games belong to Blizzard?
What are you talking about?
It is obvious you made NO effort to check this comment, and in reality just made it up.
Let’s look at the top 5 best-selling games of all time:
1) Super Mario Bros. (NES – 40.23 million)
2) Tetris (Game Boy – 33 millions)
3) Pokémon Red, Blue, and Green (Game Boy – 20.08 million approximately, 10.23 million in Japan, 9.85 million in US)
4) Super Mario Bros. 3 (NES – 18 million)
5) The Sims (16 million shipped)
[wikipedia.com]
Well, you got one thing right, 4 of the top 5 all-time bestselling games do have something in common. They’re Nintendo games. With the other top 5 game being from EA.

Please don’t make up your own facts, it has only proven to discredit your entire post.

Nick Overstreet (profile) says:

Re: Re: Re: Oh comeon

Ok, so let’s remove “bundled” games since you don’t want to count those.
#1 and #2 were the only bundled items, so move up everything else and you end up with this:
1) Pokémon Red, Blue, and Green (Game Boy – 20.08 million approximately, 10.23 million in Japan, 9.85 million in US)
2) Super Mario Bros. 3 (NES – 18 million)
3) The Sims (16 million shipped)
4) Nintendogs (DS – 15.77 million)
5) Grand Theft Auto: Vice City (PS2 – 15 million, may include PC and Xbox versions)
[wikipedia.com]

Huh… still no Blizzard games. 3 Nintendo and 1 EA and 1 RockStar.

The point being that Blizzard’s best selling game was StarCraft with 9.5 million and doesn’t even make a top-20 list. Sorry.

Dick Underroad says:

Re: Re: Oh comeon

and it only proves that people belive everything they read on wikipedia…

I think the man you trying to “disprove” is correct if he only added one small part…

4 out of 5 all time best selling PC games belong to blizzard

Please dont suck facts out of wikipedia, it has only proven to make you look like me… dick underroad….

Toddly says:

Re: Re: Re:2 Oh comeon

To Nick Overstreet

What’s your deal man? You’re throwing insults at people for lack of research, yet your almighty source is Wikipedia. If you HAD done any research, you’d know that the merger is between Activision and Vivendi games. This includes Blizzard AND Sierra Entertainment. Starcraft, World of Warcraft, Half-Life, Diablo 2… all among the top-selling PC games of all time. Depending how they count sequels and other considerations, I can see how they can claim 4 of the top 5.

Jason Still says:

Re: Re: Re:3 Oh comeon

Toddly, for what its worth, that part of the fact sheet that they released specifically lists Blizzard Entertainment as having 4 of the top 5 games (it doesn’t specify PC only) right after pointing out that Vivendi is made up of 4 units (Blizzard Entertainment, Sierra Entertainment, Sierra
Online, and Vivendi Games Mobile). Its probably just a snafu on the part of whoever put that document together. I disagree with nick’s reliance on the wikipedia numbers, but I’m not sure that I can agree that Blizzard itself has 4 of the top 5 selling (by units) pc games of all time.

Danno says:

Since this isn’t supposed to be a consumer facing brand (ie You won’t be seeing any games with an Activision Blizzard splash screen), it seems like this is more about Activision acquiring Vivendi (which, as a publisher, has slipped in recent years [see, loss of publication of Valve games, loss of publication of Relic games, general suckitude aside from Blizzard]) and acknowledging that Blizzard is such a damn huge entity on their own that they can’t rightly call them an Activision development studio.

I mean, to a stockholder, which would you rather purchase Activendi or Activision Blizzard, maker of the most popular video games in the world?

Killer_Tofu (profile) says:

Sorry Mike

I am going to have to disagree with you saying that Blizzard is in any way dependant on coming out with new big hits at regular intervals. I suspect they only do that for even More money. Blizzard has the wonderful World of Warcraft. That right there brings in gawd awful amounts of money. They are not dependant on big hits. They just choose to keep making more and aiming for the big hit mark.
Next up in line that everyone seems to be insanely hyped about: Starcraft 2 (I’m on that boat), and Diablo 3 (which I was told was announced at the last E3 but I have yet to see verification, partially because I haven’t checked).

Killer_Tofu (profile) says:

Re #8 AC

Can’t bundle with computers?
Putting all the extra shit that comes with any store bought computer aside (such as Windoze and other various softwares) and leaving it limited to games, games have come with computers.
Especially a lot of the online stores for either complete PCs or just graphics cards. When I bought the last graphics card that I am still using, it had an added bonus of Half Life 2.
I have seen plenty of other games here or there (most notably if you end up being from cyperpowerinc.com) that comes with computers.
So yah, they do bundle with computers.

Nick (user link) says:

Not going to help

As has been said, neither company can compete now with EA’s sports games, so I don’t think EA is trembling in their boots over this one. Unless they come up with “World of Sportscraft” and you can go to different arenas to compete as a member of various sports teams instead of slaying monsters, it’s not going to make any difference.

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