If you thought Activision’s acquisition of Bizarre Creations was big news, then wait until you hear this: In what is undeniably one of the most unexpected business moves of this year, Activision and Vivendi, the owner of Blizzard Entertainment, today announced that they are to merge to become the world’s largest third-party publisher.

Soon to be known as Activision Blizzard, the new company’s portfolio of game titles will be nothing short of staggering. Playing up their line-up of triple A franchises will be Activision’s Call of Duty, Guitar Hero, Spider-Man, X-Men, and the Tony Hawk series, Blizzard’s World of Warcraft, Diablo, and Starcraft, and lastly Vivendi’s Crash Bandicoot and Spyro.

The merger is expected to be completed in the first half of 2008 and will be led by the current Activision CEO, Robert Kotick. In turn, Vivendi is said to claim a 52 per cent ownership stake in Activision Blizzard.

Activision’s Call of Duty 4

Kotick commented:

Vivendi Games provides Activision with unique strategic and financial benefits and will allow us to leverage our franchises into emerging online opportunities as Blizzard has done so successfully. Activision has been very focused on margin expansion, and this transaction will meaningfully increase our overall operating margins as we expand our franchises online and in new geographies. Diversifying our revenue base among subscription-based online, console and PC formats, as well as wireless and casual emerging opportunities, gives us the broadest platform to capitalize on industry growth. With Blizzard’s successful franchises, such as World of Warcraft, StarCraft and an exciting pipeline of yet-to-be announced titles, Vivendi Games’ and Blizzard’s management team will join with Activision’s strong and experienced leaders to become an even more powerful force for innovation in online and offline interactive entertainment across a wide range of platforms. This transaction also provides a unique relationship with Universal Music Group – the world’s largest music company – which will benefit Guitar Hero and further extend our sizable leadership position in music-based games.

Blizzard’s World of Warcraft

Mike Morhaime, President and Chief Executive Officer of Blizzard, chimed in as well:

Blizzard’s industry-leading PC games business, with a track record of nine consecutive bestsellers and a global subscriber base of more than 9.3 million World of Warcraft players, is an exceptional fit for Activision’s highly profitable console games business. From our interactions with the Activision team, it is clear we have much in common in terms of our approaches to game development and publishing. Above all, we are looking forward to continue creating great games for Blizzard gamers around the world, and we believe this new partnership will help us to do that even better than before.

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