ACTIVISION BLIZZARD: The deal that changes everything?

The industry is still reeling following the Vivendi/Activision acquisition earlier this week, with the announcement throwing up the question of how the two companies will be integrated, what this means for the industry – and, most importantly, how its competitors will react.

The deal, worth an astonishing $18.9 billion, means that the new games superpower now has its sights set on toppling EA from its throne as the dominant publisher – but the implications for Activision and Vivendi staff, as well as the wider publishing community, could rumble on and on.

The major issue is that mergers of this size can often make sense in theory, but from an execution standpoint be difficult to pull off,” offered DFC Intelligence analyst David Cole. The track record for mergers between large publishers has not been good. Consolidation seems to come in waves as everyone wants to keep up with the Joneses. But it would be a mistake for other companies to rush into acquisitions without clearly thinking through the strategy.”

As the rest of the publishing community looks around for deals to help them keep pace, senior games analyst at Screen Digest Piers-Harding Rolls told MCV he believes Activision Blizzard will be a force to be reckoned with: This new company raises the competitive bar for the likes of EA, THQ and Ubisoft and the other major diversified media companies such as Disney and Warner Bros.

The acquisition could prompt further consolidation, perhaps from other large media companies acquiring games publishers, or from two publishers merging. But we would expect any deal to be underpinned by a very good portfolio and strategic fit.”

Sega of America president and COO Simon Jeffery reacted to the news by adding: I think that any competition to EA is good for the industry. After pretty much most of our whole lives, there is a new number one publisher.

Darwinism is getting bigger in the games business, and publishers are going to need to think bigger and smarter about their growth.”