Activision Blizzard Official, Merger Complete

The deal has been done, you can now officially call the company Activision Blizzard. Sure, the name is sorta lame but it does cover the bases… they’re Activision and they’re Blizzard; surely neither company wanted to lose their lively hood and branding.

We’re now looking at a company that’s more powerful than Electronic Arts, surely this worries Electronic Arts a bit. However, consumers like ourselves should be cheering for more competition against the big EA, perhaps forcing them to innovate a bit more and keep competitive.

Many gamers and industry participants would love to see independent companies grab a bit of the market share and bring in new startup companies and spin-off studios. However, if there is going to be a merger at the top-tier it might as well be one that puts pressure on Electronic Arts.

“We have created the world leader in online and console games with this transaction, and the combined strengths of the two businesses offer immense growth potential,” gushed Vivendi SA CEO Jean-Bernard Levy. “I am also very confident that, with the new leadership team in place, the new entity is perfectly positioned to take advantage of these rapidly developing markets across the globe.” (gamespot)

Now, we’ll have to wait and see if the upper level management can get along in a fluid manner and keep all their projects on track. With great power comes great responsibility, they’ve got the power… are they going to be responsible with it?

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Smart Business Choices During Economic DownturnsSmart Business Choices During Economic Downturns

Many game studios are being dropped following a bit of an economic downturn in the United States and globally. Activision has to deal with being agile enough to survive the economic times like anyone else and has dropped a few games that had great potential.

Gamers continue to ask the question, “why?” when some of their highest potential games were dropped to the floor. Ghostbusters and Brütal Legend are a couple examples of games with eager fans already salivating prior to its launch. Some of these fans are a bit ticked off that Activision named them as dropped franchise opportunities.

People ask why a company holds one “mediocre” title while getting rid of other potentially awesome ones. Don’t forget, this is a business and a good studio/publisher is going to make good business decisions without emotional attachments – those that bring emotions into play may end up with a highly valued product (to them) with no additional potential and lower revenue. This isn’t to say developers cannot be passionate about their games and their industry, they just have to build games gamers will buy and continue to fall in love with release after release.

Activision CEO Bobby Kotick is one of these business savvy individuals who knows where investors will find profits for the future, and he also know how to manage employees, with the use of software like this sample pay stub for payments and more.

“[Those games] don’t have the potential to be exploited every year on every platform with clear sequel potential and have the potential to become $100 million dollar franchises. … I think, generally, our strategy has been to focus… on the products that have those attributes and characteristics, the products that we know [that] if we release them today, we’ll be working on them 10 years from now.” (1up)

Ghostbusters is a great example of a title which could be well received and fun to play but probably wouldn’t be an exploitable franchise. The game, based on a popular movie, has limited potential for yearly releases and huge franchise success. Ghostbusters fans would probably disagree, but that’s when emotion comes into play. Think dollars and cents, not awesome fun gaming.

Oddly enough many of these business decisions from Activision, Electronic Arts and other big publishers arrive when the economy is in free fall and investors are eying your revenue potential. People make their most important and, usually, unfriendly business decisions when their company is at risk.

It’s sad to think money comes first and entertainment value comes second but we’re not the ones trying to make a profitable living in the industry. Put yourself in Kotick’s shoes as he walks into a board meeting to discuss future plans, road maps and profitability – you’d do what you have to do to keep your job, right?

EA and Take-Two Stock Falls FastEA and Take-Two Stock Falls Fast

It’s official, EA has given up their talks with Take-Two and, as a result, the stock of both companies is falling like a stone. While gamers may cheer knowing the Grand Theft Auto and 2K Sports product lines will continue to compete with EA products, share holders are doing a WTF?

Take-Two has had its share of financial difficulties, but nothing shakes up a stock more than a break in discussions when the words acquisition have been spoken. It causes uncertainty and lack of understanding on the part of the game industry and share holders. EA’s stock dropped 2.7% upon opening this morning but has begun to stablize as it’s clear EA isn’t in any financial peril from this breakup in discussion.

Take-Two’s stock, however, is in epic free fall with a 25% decline since the discussions ended. One theory is that, “is taking a huge beating as everyone and their mother tries desperately to sell the shares the figured EA was going to to buy.” (kotaku)

As the game industry gets more competitive, builds bigger bank-roll and becomes a staple entertainment icon there is always more business savvy people getting into the game trying to make a fast buck. In this case, the shareholders obviously aren’t pushing for Take-Two’s future decisions or product launches — this is the reaction of business folks trying to make money.

There is huge risk with block buster 100-million dollar titles and all the crazy hype involved with some of the biggest games in history. They break sales records, smoke box-office numbers and bring new gamers into the industry but it’s all at risk when money gets involved. One bad move and a company making a title like GTA can find themselves in financial peril.

With risk comes reward, but failure is always sneaking up around the corner so watch out!

Episode 701: Carts and GlitchesEpisode 701: Carts and Glitches

The guys continue from #700 by discussing, among other things, the upcoming Dark Forces remaster.

The news includes:

  • Xbox Partner preview
  • Cities: Skylines 2 studio promises performance issues can and will be fixed
  • PlayStation 5 Slim disc drive seems to require internet connection to install
  • Xbox sees record-breaking Q1 gaming revenue
  • Hogwarts Legacy Switch Day One update is larger than game’s cartridge size

Let us know what you think.