Activision Blizzard Q&As

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Written by BuckGB on December 3rd, 2007

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1UP: So we will never see an Activision Blizzard logo on any game box then?

Morhaine: Correct. You should not see it on anything. It will not be associated with any product.

1UP: So lots of folks on the message boards are expressing anxiety over what all this means in terms of Blizzard watering itself down in this transaction, that it's going to mean less that a game is a Blizzard game.

Morhaine: The thing is, Blizzard has been part of public entities for a very long time. There is nothing about this transaction that changes any of our philosophies or commitments to quality or how we intend to continue developing, publishing, or servicing our games. In fact I spent quite a log time talking to Bobby Kotick [Activision Chairman and CEO and now President and CEO of Activision Blizzard] and Brian Kelly [Co-chairman of Activision and now Activision Blizzard] and others, to make sure they understood Blizzard's development philosophies, our core values, the things that we hold very important, which are very much in line with the things our players expect of us, and there was a great deal of understanding. Also, they share a lot of our philosophies about quality, and they believe, as we do, that the best way to run a business in this industry is to develop high quality games.

IGN: How long has this deal been in the works? Who approached whom?

Mike Morhaime: There have been discussions going on for the better part of a year. Originally Bobby Kotick gave Bruce Hack, CEO of Vivendi Games, a phone call. They met for lunch to chat about potential things the two companies could do together. Very quickly, it became very clear to both of them that there was a potential opportunity to combine the businesses because they were so complimentary.

Then Vivendi was brought in and met with the Activision guys and was very impressed. I've met several times with the Activision guys and we've talked at length about Blizzard's philosophy on game development and game publishing and all the things that are important to us at Blizzard. We found that we shared a lot of the same values. We feel pretty comfortable with the Activision executives and feel like they're going to continue being supportive of the way that Blizzard Entertainment runs their business.

GS: Well obviously this is very exciting. I mean, the total deal is worth nearly $19 billion. That's just staggering. However, it's not the only big deal of late, and comes not long after EA bought BioWare/Pandemic, in large part for their upcoming massively multiplayer online role-playing game. Now, Activision Blizzard will be taking that project on head on. Was this deal accelerated at all by the BioWare/Pandemic buyout?

MM: I don't really there was any correlation. We've been talking about this a long time before we heard about the other deal. There was a lot of due diligence. There was a lot of understanding of Vivendi's business and Activision's business. It really took some time.

2. Blizzard - New Billing, Same Independence

One of the intriguing things about the old Vivendi structure was that, even when Martin Tremblay joined to run Vivendi's publishing, it was specified: "World Of Warcraft creator Blizzard Entertainment has been designated a stand-alone division reporting to VU Games' CEO, and is not part of Tremblay's product development mandate."

And it's the same deal, more or less, in the new system - Mike Morhaime will continue to serve as President and Chief Executive Officer of Blizzard Entertainment, and no explicit reporting structure is even discussed in the release. Blizzard will continue to plough its own furrow, then.

3. World Of Warcraft's Revenues: Absolutely Staggering

And there's a reason why Blizzard have been and are left well alone - the clout that comes with this mindblowing statistic: "Blizzard Entertainment [which has "over 9.3 million subscribers" to World Of Warcraft] has projected calendar 2007 revenues of $1.1 billion, operating margins of over 40% and approximately $520 million of operating profit."

This disclosure separates out Blizzard's revenue from Vivendi Games and Vivendi very explicitly, and shows why the division has been key to holding Vivendi Games together in recent years.

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