Games

Activision Blizzard Will Sell 5 Billion Dollars Worth of Games

After the merger goes through

By Andrei Dumitrescu, Games Editor

12th of June 2008, 09:14 GMT

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Activision has announced that on July 8 its shareholders will vote on and, most likely, approve the merger with Vivendi games, and that will result in arguably the biggest videogame publisher and developer in the world. Michael Patcher from Wedbush Morgan has announced that he expects the newly formed company to sell in excess of 5 billion dollars in the next 12

months.

The exact figure is $5.26 billion, with the analyst predicting that, until December of 2008, the new company will sell videogames to the tune of some 3.70 billion dollars. Contributions made by Sierra and Blizzard, which are now part of Vivendi Games, are likely to be less important from a financial point of view than those made by Activision products.

There are two main games that will power the growth and the profits of Activision Blizzard. Guitar Hero: World Tour could "cannibalize sales of the competitive Rock Band product, and the backward compatibility of the multi-instrument product should allow the company to retain the loyalty of many prior Guitar Hero customers." Series spin-offs like Guitar Hero: Metallica and Guitar Hero: On Tour for the Nintendo DS will also draw solid sales from more niche markets.

Patcher says that "As we look forward into 2009, there are several things that give us confidence in Activision-Blizzard's further ability to grow." He mentions the launch of the next World of Warcraft expansion, Wrath of the Lich King, as having the potential to "generate several million disc and download sales, and which should allow Blizzard to grow its subscriber base." This year will also see a renegotiation taking place between Blizzard and the China-based MMO operator The9, regarding the royalties that Blizzard receives from licensing its game in China.

The merger of Vivendi Games and Activision will see Sierra assets folded under Activision control, as Blizzard retains its autonomy. Vivendi International, a media conglomerate based in France, will gain a controlling stake in the new company, while Activision Chief Executive Officer Bobby Kotick will retain his position in the new company.

TAGS:

Activision | Blizzard | Vivendi | Sierra | Michael Patcher

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