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Activision Blizzard up for sale
Topic Started: Tuesday Jul 3 2012, 11:56 AM (179 Views)
King Hiss
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Quote:
 
An interesting story hit Bloomberg recently: Vivendi, the media conglomerate, is looking to offload its massive stake in Activision Blizzard.

Vivendi has a $US8.1 billion stake in the company, and it's going to get rid of that 61 per cent stake in the company one way or another: if no one steps forward to buy the whole shebang, the company will simply sell the shares to the market, leaving Activision Blizzard with a whole heap of small shareholders.

Why is this happening? The Bloomberg report states it nicely:

"Moody’s Investors Service and Fitch Ratings warned Vivendi this past week that its debt ratings could be threatened if it doesn’t reduce liabilities. Fourtou on June 28 ousted Chief Executive Officer Jean-Bernard Levy, who had resisted major changes in Vivendi’s structure.

A shifting market for video games may limit Activision’s attraction to buyers."

Let's think about this for a moment: The world's biggest publisher, with the world's most valuable game property, is a liability.

People can point fingers at the myth of mismanagement as much as they like. The simple fact is that the games industry has become a high risk, low-margin business, and that's not something anyone wants to be involved in.

I stand by my previous thought that the games industry is headed straight towards a crash.


Yeah, that's not good. :-/
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NecrisTEWQ
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An interesting take on this...
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I’m not sure Matt is looking at this through quite the right lens. That Vivendi is scaling back its global investments does not necessarily mean that the video game industry is headed toward a crash. By every account, the industry is growing and changing year over year. That change means that big companies like Activision Blizzard may indeed have to take a second look at their business model, but it hardly means the gaming industry itself is headed for a crash.


For one thing, this implies that the industry is in some sort of bubble. There is little to suggest that this is the case. Video game publishers and developers do not have highly inflated stock prices, and if anything those prices have been very reflective of an industry struggling to make necessary changes.

A bubble and a subsequent crash are usually marked by overly optimistic signs: overly priced products, overvalued companies, and so forth.

The game industry may be struggling, but nobody is so optimistic of its near-term growth potential that we risk popping a bubble. If buyers were lining up to make bids on Activision Blizzard then we might want to start worrying about a crash.

As it stands, the worst fear I can conjure up for the gaming industry is a period of slow growth.


And then you have to look at the actual games that they make, everything they have have been milked to shit, with the exclusion of Prototype, which wasn't/isn't everyone's cuppa tea, they have no new IP, GH series atm is dead, spyro - dead, Crash bandicoot - dead, CoD (Black ops is not part of blizzard, strictly Activision) - people are finally starting that CoD is just a re-skin following the EA sports game method, Tony Hawk - Dead.

What they do have going for them.

World of Warcraft - Even though this is going strong very soon their likely to lose a lot of subs with games like GW2 finally having a release date (buy to play MMO), SW:TOR Going to a F2P model at some point in the near future, and tera acually doing quite well on the subs market and stealing some WOW subs, later on WoW could be going through a rather tough patch of alot less people on their servers.

Starcraft 2 - Bringing out the Heart of the Swarm expansion which is apparently unbalanced to all hell, and SC is largely still so popular because of it's ladder tourney's and MLG popularity.

Diablo - Eh, made a lot of money but couldn't sustain a business.

Looking at that, It could very well be seen as Acti-blizzard being a liability, their running out of games to milk and no news of new IP, vivendi could just be making a Pre-emptive pull out before stock prices drop badly. Alot of good games lately seem to be coming from the smaller business who focus less on money and more on making fun games. big businesses seem to be just milking what is successful and not looking at new stuff.

After all for most big businesses it's just business....
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King Hiss
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I think the idea of another crash is on the extremely pessimistic side of the fence, but there are many factors to take into consideration, some you've hit on the head, and also the insane amount of possibilities that could come of this.

You're right, business is business, and that's what makes this particular instance so eye-opening. They are the kings of milking every last cent out of us, and as much as people are FINALLY waking up to the nonsence that is COD, the fact still remains that it is one of the biggest sellers each and every year. The franchises of WoW, Starcraft and Diablo are worth a stupid amount of money and even though all three need to be sent off to the mechanics right now, a change of attitude would put all three clean on top in a heart beat. All three games are the heart and soul of the Asian gaming world.

Spyro is not dead. The Skylanders game opened up a whole new market of micro-transactions to them that they have only just begun to milk. Guitar Hero was only stunted by the sudden jump in the genre made by Rocksmith. Tony Hawk's HD is about to be released, and I don't doubt that could ressurect the franshise once we all remember what made the originals so simple in their brilliance. Funnily enough, Prototype is probably the one series you could say is well and truly dead after they shut down the studio last week.

So how does a company who owns all that and can manage to milk the shit out of each and every single one be seen as a total undesirable to such a big business? It's not just a sell off by the sounds of it, it's a "get it the fuck away from us" sale. That's pretty scary for the industry, and I don't necessarily think it's the lack of new stuff that's the problem, but most definitely the milking.

Once again, besides looking at companies who do or have managed to successsfully make software and hardware, I think Epic is a good example of a company run well. Yes, their games have a massive budget as well, but they take their time with them, they release quality titles with serious shelf life, and they extend that shelf life with good quality DLC. That initial investment is backed up by strong support and consumer confidence in their product. They give you reasons to not want to trade in, and the extra's are obviously not something that has come on the disc and been spoon fed to you on pre-determined dates. Their push for quality results in them having an engine that they can even sell on to other software companies. Basically, by not being untrustworthy fucktards, they are being rewarded. There is something to be said for the days of hanging for every Sega or Nintendo game because you knew it would be quality, than seeing Mario and Sonic stuffed into every game possible. The problem isn't the big budget's, it's about convincing us that we should give a fuck and then maintaining that. Hopefully this isn't a lead up to a crash, but a clean up of the bullshit.

Now, who has the kind of money to buy up all these shares? Or at least 51% of them? Maybe a company as huge as say Microsoft or Sony? Think about that for a second. I'm sure they are.
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branden77
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Steam/Valve. Nearly as rich as the church.
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King Hiss
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True that, but I wonder if they would even give a shit? They'd probably love the Blizzard part of the company.
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NecrisTEWQ
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The main issue I have with ALL of this, is no matter who gets the shares, will they try and just make the money back by milking more shit or try and get some original ideas up, cause it certainly has the talent to make good games.
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felicitous blue
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I think the issues with diablo highlight the internal challenges acti-blizzard are having in creating a financially sustainable business model. I'm not surprised to read they're being considered a liability.


I don't think we're going to see a crash though, not like the one in the 80's anyway. What I do foresee is that the whole video game sector is going to go through a massive restructure in delivery and 'pricing'. I believe an effective Parallel can be drawn with the cinema/TV industry, in fact it's already happening. There will still be the 'standalone' purchases, equivalent to cinema/DVD - games you purchase outright. These will be the exception, blockbusters mainly and then some niche indie titles. Then we'll have the equivalent of subscription TV - pay to play, subscription model; this would include subscriptions to a specific game, as well as too a "channel" (eg OnLive and what playstations plus already offers). Then we'll have the equivalent of free TV - games funded through micro transactions and adverts (see Sony's recent patent involving ads in games).
yo listen up here's a story
about a little guy that lives in a blue world
and all day and all night and everything he sees
is just blue like him inside and outside
blue his house with a blue little window
and a blue corvette
and everything is blue for him and hisself
and everybody around
cos he ain't got nobody to listen to

i'm blue da ba dee da ba die...
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King Hiss
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iOS games are already being brutalled by IAP's. They industry is definitely testing those waters. Looks to me though like the general consesus is that people are happy to pay for a quality product, sut not as much as the industry is currently dictating. iTunes, Live and PSN have opened the doors so that it isn't only big software companies who can define the market anymore, and we've been saying for years that $80 - $100 is too much, and now we're pushing $120.

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NecrisTEWQ
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that's for aus only though, the states are still only $60 fir a Console game that we pay 100-120 for
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