Two of the video game worlds heavist hitters have teamed up

By Loren Lankford

HOLLYWOOD, CA (Hollywood Today) 12/4/07- The highest score ever in a video game is now $19 billion. That’s the combined worth of the merger between video game companies Vivendi and Activision. The French and U.S. rival game makers, behind such hits as “World of Warcraft” and “Call of Duty,” are teaming up in order to form the new world leader.

The pair will now challenge Electronic Arts for market dominance.

Vivendi Games is known internationally as the makers of the hit game “World of Warcraft,” an online multi-player subscription game which was developed by its Blizzard Entertainment subsidiary, which has an estimated 9.3 million players. Blizzard says that “World Of Warcraft,” “Warcraft,” “Diablo” and “Starcraft” are four of the top five best selling personal computer games of all time.

Besides the “Guitar Hero” franchise, which Activision got in May 2006 when it acquired Red Octane for $100 million, currently has WWII epic “Call of Duty IV” and the skateboarding series tied to Tony Hawk.

Activision Blizzard is the name of the new company and said in a joint statement that they plan on being “the world’s largest pure-play online and console game publisher.” With combined revenues of 3.8 billion dollars in 2007, it doesn’t seem like a far off goal.

Vivendi plans to put 1.8 billion dollars into the new company while keeping its Vivendi Games subsidiary, based in Irvine, California, in the loop. While at first getting a 52 percent stake in the concern, it will increase to 68 percent over time.

The group chairman said the new company would be “a worldwide leader in a high growth industry. This alliance is a major step for Vivendi and is another illustration of our drive to extend our presence in the entertainment sector.”

Additionally, Activision chairman Robert Kotick said that “by combining leaders in mass market entertainment and subscription-based online games, Activision Blizzard will be the only publishers with leading market positions across all categories of the rapidly growing interactive entertainment software industry.”

Activision was created in 1979 and is known for its hit games “Call of Duty,” “Guitar Hero” and the Tony Hawk skateboard series. “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,” said Kotick.

Kotick, who will stay on as Activision Blizzard’s president and chief executive, highlighted the increased access his firm would get to the “rapidly growing Asian markets.”

The joint statement released by the two companies said that Vivendi Games has projected 2007 revenues of 1.1 billion dollars and Activision expects revenues of 1.5 billion dollars for the fiscal year, ending in March.

While the board members of both companies have agreed to the deal, they still need approval from the Activision shareholders. This should be completed in the first half of 2008, according to the statement.

-AFP contributed to this report