At 8:30 AM ET the heads of Activision and Vivendi Games led a transcontinental conference call to explain yesterday's Activision-Blizzard merger news. Vivendi CEO Jean-Bernard Levy revealed that the deal had it's genesis a year ago.
Among the headlines: this merger has not ignited any plans for a "World of Warcraft" console game. "We don't have any plans on the console side," Blizzard CEO Mike Morhaime said. "Blizzard's focus is on the PC side. If we were to release anything on the console side it would be managed on the Blizzard side of the business."
Most of the talk on the call involved financials and repeated explanations that the combined company is projected to have the largest income of any game publisher. Activision CEO Robert Kotick estimated that Activision Blizzard will have 15% of the $28 billion worldwide gaming market, allowing plenty of room for growth. He said the company will have 6000 employees, about half of them in "product development." Said Kotick, the combined company "unites the industry's best development resources in one organization."
What games are these executives most proud of? Activision's "Tony Hawk" did not get a mention on the call, but "Guitar Hero" did. The most enthusiasm was expressed for Vivendi-owned Blizzard's "World of Warcraft." Levy described it as " the most powerful relevant and successful interactive brand ever." It was revealed that Blizzard will report $1.1 billion in revenue this year, $517 million in operating income.
Repeated mentions were made of "unlocking Blizzard's value." Kotick said the combined company will "derive the benefits form Blizzard's deep knowledge of online gaming and the Chinese and Korean market." How this will affect Blizzard is unclear. Yesterday, Blizzard posted a FAQ on the company's site that implying little would change about how Blizzard Entertainment makes its own games.
As for how this will affect Activision's series...
A slide-show released to accompany the press conference (PDF Warning! Download that link rather than open it) revealed plans that Activision's product pipeline includes: "Guitar Hero IV," "Call of Duty 5," a new "Tony Hawk," a James Bond game, new Marvel games and a racing game from recently-acquired "Project Gotham Racing" developer Bizzare Creations.
Kotick said that, of Activision's main series, "you can expect evey one of those properties to be exploited annually or on a near-annual basis."
One financial analyst on the call asked the executives how much bigger "World of Warcraft" is expected to get. Blizzard CEO Morhaime said he didn't want to be "in the habit" or projecting subscriber growth but did add: "I can tell you form a high level we intend to grow our subscriber base and are also looking at additional markets that we think will continue to come online as broadband penetration grows in territories like Russia, eastern Europe, India and these are the types of markets we're looking at."
Another investor asked Morhaime what Blizzard gets out of this, including the possibility of applying Blizzard's expertise to Activision properties. Morhaime answered by discussing Blizzard's "core philosophies, which really revolve around developing high quality software... we found that Activision shares these values." What does it gain them? Morhaime said the company benefits from having its finances revealed publicly for the first time. "This presents us the opportunity to give us the currency to attract and retain talent which is very important in our business."
At the close of the call, Kotick became the first to address the home console race. Kotick name-checked the Wii and Xbox 360 and said that "things like physical interface or better production values... are all catalysts for bigger, better audiences than we have ever seen before." The mainstream audience of games has finally arrived, he said, and this new, bigger proposed company is an ideal one to capitalize on that.
