Vivendi May Sell Activision-Blizzard For $8.1 Billion
Author: William Usher
published: 2012-06-30 16:05:16
A new report from Bloomberg recounts a few new details regarding media giant Vivendi Universal and their attempt to offload their stake in U.S. software publishing giant Activision-Blizzard. According to Bloomberg, Vivendi is trying to levy off their $8.1 billion in Activision-Blizzard to buyers.
While most gamers see Activision-Blizzard and their annual $1 billion revenue share from Call of Duty combined with the $100 or so million a month from World of Warcraft as the company doing well, investors, Vivendi in particular, has not been satisfied with the overall direction of the company. We did an article last year basically reiterating what Vivendi is saying now, and it's that the stock hasn't risen quickly enough and they want the stock boosted up immediately from its nine-year low of $11.99. Take note that in 2007 Activision's stock was sitting at $67.06 per share. That was very impressive.
According to Bloomberg, however, the offloading of Activision-Blizzard is something Vivendi is serious about. According to an anonymous tipster, if no one buys Activision-Blizzard for the $8.1 billion then Vivendi will sell off shares on the market.
The Wall Street Journal recently reported that Vivendi's CEO Jean-Bernard LÚvy resigned due to not favoring the current direction of the company, and executive board members are now placing a lot of the burden on Chairman Jean-Rene Fourtou to pull the company out of its current slump.
Take note, however, that technically Activision and Blizzard are both doing quite well in the gaming marketplace and next to Nexon and Nintendo, they are still one of the largest and most profitable publishers within the market. Diablo III even broke first-week sales records for PC, selling 6.3 million copies. Call of Duty has consecutively broke sales records since Call of Duty: Modern Warfare 2, which game thereafter accruing more than $1 billion in less than three weeks being on the market. Basically, shareholders simply want more.
Despite the piss-poor world economy it seems daft on the part of executives to try to pull more out of a company that's already doing quite well while others are closing up shop and shutting down. And even supposed "underperforming" products like Prototype 2 still managed to sell close to a million units, which didn't stop Activision from gutting out Radical Entertainment.
On Blizzard's end they're experimenting with trying to turn games into services, as opposed to being products, using measures such as always-on and a new mainstream mechanic known as the Real-Money Auction House to basically profit from virtual item trades. The RMAH is basically like Blizzard's own little stock market where they receive a 15% cut from users who cash out their earnings into real-world money. Quite naturally, the measures have created a firestorm of media backlash, with many grey-area issues causing gamers to consistently lose money on a regular basis due to poor customer support and slanted regulations.
Hopefully Activision-Blizzard can split apart if the sell really does go through and then maybe Blizzard can get back to making quality games on a smaller scale, while Activision can focus on rebranding their franchises.
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