The Economist Comments on Activision Blizzard

[gojira]

The Economist (http://economist.com/) has a story on the merger of Activision and Vivendi. They are generally positive about the deal, saying it makes sense.[Vivendi] will buy $1.7 billion of new shares in the combined group—Activision Blizzard—implying a value of $18.9 billion for the new company. Shortly after the deal closes, Activision Blizzard will launch a $4 billion buyback of its shares. The upshot will be, if the buyback is fully taken up, that Vivendi gets a 68% controlling stake in the new firm.
The full story (http://economist.com/business/displaystory.cfm?story_id=10238617) contains some more analysis of the deal and also of the game industry overall. It's an interesting read.

[wyeast]

As a business, for them it's great. For us, as consumers, it's bad specifically because of how Activision treats their developers/franchises, and because they're using EA as their role model.

Same way only the shareholders benefit every time they shrink the damn box of cereal and charge us the same price for it.

[Zander]

The obvious consumer view is this is a bad thing. I've been trying, really hard, to try to see how this merger is a good thing for the consumer at home. I haven't found it yet.

[Zanzibar]

As a business, for them it's great. For us, as consumers, it's bad specifically because of how Activision treats their developers/franchises, and because they're using EA as their role model.

Same way only the shareholders benefit every time they shrink the damn box of cereal and charge us the same price for it.

Activision treats its developers VERY well. Activision strives to let successful developers continue to manage their houses the way the existing management sees fit, with little or no Activision decrees as to how the team should be structured. This is COMPLETELY unlike EA, which treats its newly-acquired teams as Borg fodder and forces the teams to adhere to strict management regimens.

Believe me, after we were bought by Activision, we were all really nervous about how things would change. But our main guys all stayed, and the atmosphere around here hasn't changed at all.

[gojira]

How do you feel about Vivendi?

[Skytram]

As a business, for them it's great. For us, as consumers, it's bad specifically because of how Activision treats their developers/franchises, and because they're using EA as their role model.


Wow - you couldn't be more wrong with that statement. Do you have a source about Activision modeling itself after EA, or how they treat their developers similar to EA?

[dark_inchworm]

How many devs has Activision bought and nuked, again?
Hmm?

[Karmakin]

dark_inchworm:I'm not really familiar with them nuking any developers, to be honest.

[Zanzibar]

How do you feel about Vivendi?

Honestly, I'm curious if anything's going to change. Blizzard has always been 'it's done when it's done' with regards to ship dates, and then we balance the recent statements that Guitar Hero and Call of Duty will be an 'every year' kind of IP.

The only potential pitfall is using the merger as a reason to 'clean house' on some of the Activision developers who have dropped the ball recently.

In truth, I'm going to take Activision at their word that the merger won't affect the way Activision does business.

[Zanzibar]

dark_inchworm:I'm not really familiar with them nuking any developers, to be honest.

Yeah, who did they nuke?

[Amalor]

I'm prolly missing something, but why would Blizzard sell? They are obviously doing great bizness. Anyone see how Blizz benefits from this?

[dark_inchworm]

Yeah, who did they nuke?

That was the point; I don't think they've smashed any of them. I was comparing them to EA and suggesting that they do not follow EA's practices as closely as previously suggested.

[Zanzibar]

That was the point; I don't think they've smashed any of them. I was comparing them to EA and suggesting that they do not follow EA's practices as closely as previously suggested.

AHA. Okay, sorry, thought you were backing up wyeast. Yeah, Activision's been pretty good. There was a developer that was having some troubles, and instead of canning the whole group, they relocated the artists to other Activision studios and put the programming team on rendering engine work and doing PS3 ports. And even THAT was a last-resort kind of action.

[Skytram]

I'm prolly missing something, but why would Blizzard sell? They are obviously doing great bizness. Anyone see how Blizz benefits from this?

Blizzard has been owned by other companies for quite a long time - I think since 1997. In this case, Vivendi Games (which owns Blizzard) and Activision are merging to form a new US company called Activision Blizzard, of which Vivendi (the French mega-conglamerate) will be a majority shareholder.

To address how Blizzard benefits and what this means for Blizzard, see this FAQ (http://www.blizzard.com/press/activision-faq.shtml).

[Exodus]

Activision was formed on the ideals of NOT screwing the developers.

I can't recollect them screwing anyone over and that's why they haven't come under fire yet. What happens from now though will decide a few things, blizzard and activision, both big names, will we see another ea? if they can keep to the standards of polish that blizzard id renowned for, we will see.

[jpublic]

I think we have to be reasonable here. Activision has built a reputation of being a very good publisher for developers to work with, and Vivendi's got a decent rep as a publisher marred mostly by the some of houses they have under their umbrella (case in point: Sierra).

I'm holding a wait-and-see attitude here, but based on Activision and Vivendi's past behavior, I think it's reasonable to assume that we'll likely see a continuance of their current strategy.

However, I confess to being concerned that this move may be the harbringer of a introduction of EA-like attitudes in the new company, since if we're going to be honest, we have to admit that EA's strategies *make* *money*.

[Librum]

I've seen a lot of misinformed commentary about Blizzard 'selling out' and how people hate to see 'independent' companies gobbled up by larger ones. Blizzard's been owned entirely lock stock and barrel by Vivendi, one of the world's largest media conglomerates. This is actually putting them in a smaller company with the merger, though only relatively speaking. The wikipedia entry on Blizzard does a good job of giving you a rundown of Blizzard's history, and you can see that they've managed to maintain the ability to make some amazing games even while being shuffled around from owner to owner.

I think the consumer will benefit from this deal in that it stands to create a company that can compete with the likes of EA on its own footing, and I think it's a big step up for Blizzard to become part of a focused gaming corporation rather than be a tiny part of a gigantic megacorp like Vivendi.

[wyeast]

My information re: Activision and the treatment of their developers is admittedly second hand, but from what I've heard the environment at Treyarch hasn't been exactly nurturing. I won't go into much more detail than that because I don't want more people getting fired, but every time I hear stories they've never been singing their praises.

[roboflavinoid]

My information re: Activision and the treatment of their developers is admittedly second hand, but from what I've heard the environment at Treyarch hasn't been exactly nurturing. I won't go into much more detail than that because I don't want more people getting fired, but every time I hear stories they've never been singing their praises.
Perhaps that's because they are located across the parking lot from ATVI, which in the context of a developer/owner relationship is a little like living in your parent's basement. It's always hard to have a good time when someone is constantly reminding you of your bed time. Metaphorically speaking.

[Zanzibar]

Honestly, I haven't talked to anyone at Treyarch, so I don't doubt your characterizations. I do know that they work on two or three projects at a time, which is an IMMENSE responsibility. There's always at least one project in crunch mode, which means that people get pulled off of one project to help firefight on another. That's stressful, and that also means that Activision gets nervous, which means they're paying close attention to deadlines and so forth. If one project gets behind, it invariably means that the OTHER projects get behind as well, because you're pulling resources which limits development of the other games.

If anything, I think that's a developer management issue, not necessarily an Activision issue. Managing multiple projects is a dangerous job for anyone. It's the developers who sign up for the responsibility when they say they want a second team working on a second project.

But, I'll reiterate that I don't know the specifics of what you know about Treyarch. We've been very lucky with Activision.

[51|RandoM]

Same way only the shareholders benefit every time they shrink the damn box of cereal and charge us the same price for it.

Ever hear of inflation?

[roboflavinoid]

If anything, I think that's a developer management issue, not necessarily an Activision issue. Managing multiple projects is a dangerous job for anyone. It's the developers who sign up for the responsibility when they say they want a second team working on a second project.
QFT. I've never personally experienced 2-team development that has gone smoothly. Inevitably, the best resources in the studio are split between the teams, and each team competes for new hires, compromising the quality of both projects. On top of that, if there is a hiccup in the flow of new projects, the studio often has to make choices between really good people in duplicate roles, knowing that they may be needed later but with no work for them at the time. From the perspective of the individual employee, problems such as this may look like poor management, when it is really just fair management in a difficult situation. I don't want to speak for those at Treyarch but I have the feeling this is no different for them.