Microsoft among potential buyers for Activision Blizzard - Report
By
Eddie Makuch, News Editor
[UPDATE] Vivendi banking reps reportedly in talks with Halo publisher, Time Warner, Tencent, and others about purchase of Call of Duty, WOW studio; Wedbush analyst says "None of those make sense."
Could Halo and Call of Duty one day be made under the same roof? Reuters reports that Vivendi has enlisted the help of a bank to speak with potential buyers for Activision Blizzard, and the list includes Microsoft, Time Warner, Tencent, and a group of private equity firms.
"It's nothing official yet, but they've asked a bank to go and talk to possible buyers for Activision," a source close to Vivendi's board told the news agency.
Vivendi presently owns a 60 percent stake in Activision Blizzard and stands to raise close to $10 billion by offloading the company, the sources said.
While Microsoft has the capital to purchase Activision Blizzard, the source told Reuters the Seattle technology giant is currently focused on building its next-generation Xbox.
"They probably don't want to distract themselves too much, but they are the ones who, if they want to stay in games, would think about owning some of these big franchises, not just providing the consoles," the source said.
As for Tencent, earlier this month, Activision Blizzard announced a deal with the Chinese company to bring Call of Duty: Online to China as a free-to-play game. However, a banker speaking to Reuters believes Tencent taking full ownership of Activision Blizzard would be a "big step" because of the companies' varying business models.
"[Activision Blizzard] have two big franchises, Call of Duty on the console side and World of WarCraft on the MMOG (massively multiplayer online game) side. And China is not a big market for console businesses; online games are much bigger for various reasons," said the unnamed banker.
A Microsoft representative told GameSpot, “Microsoft does not comment on rumors or speculation.”
Despite Activision Blizzard's success with the Call of Duty series and World of Warcraft, Wedbush analyst Michael Pachter suggested in June that Vivendi might not have many suitors for the game maker.
"The problem is there are no readily apparent buyers for Activision," Pachter said at the time. "The only option left to Vivendi is to lever up Activision's balance sheet and pay out all of its cash as a dividend, then spin the company off."
[UPDATE] Pachter continues to hold this belief, telling GameSpot this morning that none of the above-mentioned companies are in a position to acquire Activision Blizzard.
"None of those make sense," he said. "TenCent is the only one actively acquiring, and they make much smaller acquisitions. Time Warner has never spent more than $150 million on game investments. Microsoft would lose a lot of value if Call of Duty was Xbox only. None of these are buyers."
It first came out that Vivendi was looking to offload Activision Blizzard in June, when a Bloomberg report stated Vivendi's board was planning to meet to discuss selling its majority stake in the game maker. Later that month, Vivendi CEO Jean-Bernard Levy was ousted for butting heads with the board regarding the firm's restructuring plans. And a new report suggested if a single buyer could not be found, the company would look to unload its shares on the open market.
By
Eddie Makuch, News Editor
Eddie Makuch (Mack-ooh) is a News Editor at GameSpot. He works out of the company's Boston office in Somerville, Mass., and loves extra chunky peanut butter.
305 comments
1 Like Regardless who owns the rights... to exclude PSN gamers from Call of Duty would be a dumb business venture and surely cost the company billions.
1 Like Who ever gets Activision-Blizzard has a good chance to make a lot of money. I wonder who will get them. Only time will tell.
2 Like Are Vivendi people psychics? Why sell one of the biggest publishers to raise $10 billion? I thought Act-Blizz brought them a lot of money? Possibly looking to something else other than games? I know they're a media corporation first, games last.. just curious as to why they're making this move. Hmmm.
1 Like Make CoD Xbox exclusive. Thatll make people flock to buying your console. Then after everyone buys your console... Kill the CoD franchise please
3 Like @IcedViper I assume you do not like Call of Duty because you want it dead. If you do not play Call of Duty then why do you care if others do?
Even though the value of Activision as a whole would be lower if it suddenly became XBox exclusive, I still think it would be clever for Microsoft to swoop in for the kill and make exclusive some of the most economically successful franchises in existence... There simply aren't enough Microsoft game studios.
wow.. i said ms would buy up some 3rd party devs for next gen. but i never woulda thought they buy 1 this big!! it will sell a ton of next boxes over the ps4 and wii u. just wish i had a fraction of what they will have to pay to buy it lol
if this was to be true and microsoft buys actavision that would make my day they would only then release call of duty on xbox and pc plus what other games actavision has laying around
1 Like Pacheter is a moron. I am not saying this will happen, but his thoughts on it make no sense. Microsoft would lose value if COD was XBOX only? The game might not sell as many copies... so from that point, they would lose potential revenue from that particular game... however, how many dedicated COD fans that play in on playstation would by an xbox (and likely the next gen version over the PS4) just to play COD? It could make a significant difference to console sales. Besides, Microsoft can own and not treat it as an inhouse developer. They could still distribute indepenently, meaning Microsoft would gain from their rivals success, and lose nothing if their rivals failed.
I could foresee them breaking up the big two with someone purchasing Blizzard and Activision breaking up further and having their dev teams and IPs bought our separately.
3 Like $18 dollars, cash money, for dat der Call o Duty you gots fo sale. I usually don't go dat hi fo wawn-out, second hand junk like wutcha got der, but me an da boyz thinkin bout makin us a good type investiment.
2 Like How in the HELL would MS lose a lot of value if CoD were xbox only?
I mean think about it, CoD is the highest selling gaming franchise currently out there. I would think MS buying it and making it xbox exclusive (console wise, still pc as well) would not only help drive xbox sales (Could you imagine them buying it and then having the next CoD be a major upgrade that comes out with the next gen consoles?) but it would also put a damper on their rival Sony.
@Stiler It's simple. The game has the capability of selling a significant amount more copies over both consoles rather than just one. To limit the sales of a game that you know will sell is a loss of value. Buying the franchise to push your next gen console is a risky investment especially considering consumers may not end up being ready to afford the new consoles when they arrive.
@Stiler Microsoft would loose money because they would only have the potential for about 1/3 of the money CoD currently makes being a multi-platform game. Going exclusive will not see a return on investment that is greater than the money Microsoft would have to pay out. It would sell some additional units due to diehard CoD fans, but it wouldn't be enough to make up for all the lost sales.
So it sounds like an awesome idea for Microsoft, but in reality it could have a negative impact on Microsoft's bottom line.
I explain more of my thoughts on this down in the comments, but I stand by the thought that Microsoft is not a good suitor for Activision properties. The properties would be better off being handed to a company that is not Sony, Microsoft, or Nintendo. None of them would benefit enough from gaining these franchises as exclusives.
@Stiler I think he means Activision would lose value, as in they wont make as much money. The amount of people who would buy an xbox just for Call of duty, is much less than the amount of people who would buy call of duty on their currently owned ps3's.
2 Like Not going to happen. 60% stake is just too big of an investment. Now if Activision and Blizzard gets broken up, we might have something here.
Microsoft would loose alot of value if CoD was Xbox-only? How so? I understand that the aquired stock valued from Activision would drop, but any CoD player would have to get an Xbox to play it. Imo, Microsoft should buy it because they have very few first party games. Since letting Bungie go, they should get Infinity Ward, hire back those 2 guys that used to lead it, and make some games!
I'm not a PC player, but MS is the exact type of company you'd want owning/running WoW.
and if microsoft will buy It means that Next gen will have big problems, and also we will have More less PC games from activision.
2 Like If Microsoft does buy this, than it could very likely push the new Xbox way ahead of the WiiU and PS4 (which according to poll its already very far ahead, but that could change any minute). I don't play CoD, but imagine if it became an Xbox exclusive. Every douchebag ages 9-23 would be buying an Xbox over a PS3. Of course, that could potentially damage the console, CoD players are the most racist/sexist/loudest/homophobic/unskilled/annoying/whiny/arrogant/douchy people gaming for the most part and lots of people might migrate over to PS4 just to get away from that.
1 Like @vault-boy true...a CoD exclusive only is a very bad move from Microsoft...then again why would Microsoft buy Novision? Halo is MS only...Hehe Imagine Respawn Entertainment buying Activision...hehehe...
I don't see anyone buying the whole thing, its just too big an investment right now. It will probably end up being broken up into Activision and Blizzard possibly even smaller than that with companies will just picking up the teams, projects and IP's that they want.
@moonlightwolf01 I agree with you. Console makers are heavily investing in their next-gen machines right now and non-gaming companies don't want to spend that much for a market they don't favor. Aside of CoD and WoW, what else is there that's worth any real value to another company?
It would be hilarious if Microsoft bought Activision and lost the lawsuit Motorola filed against them. Imagine the US with no Microsoft. By extension (if they buy Activision/Blizzard), that would mean no next gen X-Box, no Windows for PC, no Call of Duty and no World of Warcraft. No next gen X-Box wouldn't bug me much, no Windows for PC would, but no CoD or WoW would (IMO) potentially improve the country. Some people might even go outside for the first time in years.
1 Like @Klokateer Even if you don't like or care about a new Xbox, if it doesn't come out or it fails for any reason, its going to have a huge (and negative) impact on PC gaming. Also, WoW and CoD don't have enough of an effect on the country to for it to improve without there presence.
@vault-boy No Windows would affect PC gaming far more than no next-gen X-Box. The only possible news I've heard about the 720 is that it may be digital downloads only for games or otherwise lockout secondhand games, neither of which is very encouraging.
1 Like oh man, if microsoft gets some of these franchises, i only imagine what they did to rare...bad idea
@jsmoke03 rare doomed themselves not microsoft they were to busy making kiddy games thats what killed them
6 Like Michael Pachter is a worthless know nothing douch... He also predicted SWOR as being the game that would topple WoW.
5 Like @Master_Turismo Take-Two doesn't have the money. It's more likely Activision buys Take-Two and not the other way around.
So much for Blobby Kotick's plan. I've been saying a lot that the core audience, the ones that has the financial means are an important factor. Not gamers that buys CoD or shallow games or tricked into DLC. The core audience are veteran gamers who manages to balance gaming and work. They are the ones who buy games and a lot of games and able to spot quality before games come out. And has no problem buying tons of games. But this gen many are targetting casual gamers, flooded by dlcs, and f2p models. Sure you gain short term profitability but long run these casual gamers not all would keep gaming as hobby. Gaming is not cheap! And have to be commited with time, social sacrifices and dedications. Time to retire Kotick, you had your chance. I always knew our boycott works it always does. Next EA then Capcom. You been warned!
3 Like @hardeddie Uh.... I think you're really confused about business.Vivendi is selling it's shares of Activision-Blizzard because they're trying to get away from the US. It seems like Vivendi (a french company) is trying to sell off all it's nor European assets because they expanded too fast in the 2000s. Their selling Activision right now because they'll get the most money out of right now because it's at the top. A-B actually made more money in 2011 than in 2010, compared to the rest of the videogame industry where sales fell.The Boycott did not work, obviously if you saw the sales of Call of Duty: MW3 and Diablo 3.
@LoserMike i dont know if its at the top in 2007 vivendi merged with activision for 18 billion they all ready had blizzard so to let both go for 8 billion seems like a serious loss to me. as good as one game sales. thats all they have every thing else has flopped in the past few years and wow has lost a ton of subscribers.
1 Like I could see Microsoft buying Activision so they could make Call of Duty an exclusive title. It practically is already but by making it an actual xbox exclusive it could make a lot of casual gamers and children who have parents buy their consoles choose xbox so they can play Call of Duty.
Microsoft does not need another shooter as an exclusive. Especially one that has as much hate out there as any other game(although it will always sell). I do not get why they can't expand their exclusive library. I mean in terms of genres. They have money of course, do they just not have the means, or can't get the right dev teams on board?
@tightwad34 Would MS even publish a Multi plat game though? I could see PC and Xbox but a MS owned studio publishing games on PS and Nintendo doesn't sound like it would happen.
2 Like @toddx77 But like it was implied, you restrict CoD to one console and its going to lose a certain amount of sales that they won't be able to recoup with that stratagem you out-lined. Some people who play CoD are not attached enough to it to buy a system just to play it.
@FlawlessGoBot True and I am no business expert but as I see it there would be a great number of people buying the next gen xbox simply if it meant it was the only way to play COD.
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