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The future of Activision Blizzard

Mike Schramm

So now that the news has broken, the CEO has been interviewed, and the dust has settled on this weekend's merger, it's time to ask the big question: Why? Blizzard and Vivendi are on top of the world in terms of their field right now. Why would they combine with Activision, especially if, as they claim, nothing at all is changing? Why go to all the trouble if it'll make no difference in either company's business?

And the answer-- in my analysis-- is, as usual with most mergers: money. The fact is that Activision wants to be the biggest gaming company in the world. They want it all-- consoles, PC games, you name it-- and connecting with Blizzard helps them get a big part of that. World of Warcraft has turned Blizzard from a quality game designer into a videogame powerhouse, and Activision, in reaching for the top, has invited Blizzard on their team.

Blizzard will profit from it as well-- Activision knows how to get games published and marketed (just look at Guitar Hero III, which has done incredibly well for being a game that was not only not made by the original developer, but actually released up against a strong competitor made by the original developer). Blizzard knows how to make great games, and Activision knows how to release them, so both companies obviously think this is the beginning of a beautiful friendship.

But is it?

Simon Carless at GameSetWatch has the most cynical commentary so far: he says that Activision's CEO getting put in charge means they wear the pants, so to speak, and that even so, Activision is actually marrying well in this relationship-- as you might imagine, World of Warcraft's revenues are "staggering." EA, says Carless, is probably worried, but not actually threatened, by the relationship-- they're still bigger than Activision, and if Warhammer Online does well, EA won't have anything to worry about in almost any of their markets.

So in the short term, the talking heads at the company are probably right-- nothing will change. Vivendi and Blizzard are just securing their future in game publishing with a company that's shown it knows how to publish great games and do it well. Blizzard will still be Blizzard, and Activision will still be Activision-- they'll just both be called Activision Blizzard.

Where things may change, however, is a few years down the road, when Activision's management has turned over a few times, and Blizzard is working on new properties, possibly even a console property. Right now, the two companies have almost nothing in common, and that's why a merger works so well for both of them. But if Blizzard decides (or, in the future, is asked) to work on a console title, or if Activision decides that an old Blizzard property needs a new title not made by Blizzard, then we could see problems. Blizzard is known for taking their time and releasing quality titles, and in profitable game publishing (like what Activision is doing), the chance to do both of those things is hard to find.

For now, everything's fine. World of Warcraft isn't going anywhere, and odds are that any titles Blizzard has in development won't change either (as if we would know if they did anyway). But in the future, the bond between these two companies may grow stronger (or weaker-- maybe Vivendi, who still holds a controlling stake in Activision, will decide it was a bad idea and separate the two divisions), and that's when we'll see the effects of these decisions come into play.

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