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Blizzard-Activision Merger Official
The Washington Post's Mike Musgrove is reporting that the Blizzard-Activision merger is official as of yesterday afternoon. "One analyst has predicted that the merged company would make $1.38 billion in profits during its first financial year, enough to make Activision Blizzard the world's largest game publisher. [...] But this merger should give the newly-formed company enough heft to compete with EA for such blockbuster projects, said Pachter. 'It's good to have a duopoly instead of a monopoly,' he said. 'This just makes the industry that much more interesting.'"
Doesn't Blizzard bring in more than a billion in profits a year, by itself? What's Activision bringing to the table?
Can you be Even More Awesome?!
"Think about what ads in web-search did for Google."
Shame that is a radically different market. I mean really, while your shooting at Diablo are you going to stop and click on an Add to 'Al's Archery supply'
With Google, people are in the mindset that they will be looking at web pages already.
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Yes, but that is said about most mergers, and it's never true.
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Question: "How does this impact D3?" Answer: "It doesn't."
Ditto for WoW and Starcraft.
Blizzard Entertainment is retaining all of its own staff; no one's going anywhere.
The actual merger is more akin to "Vivendi-Activision", but Vivendi doesn't have as strong a brand as Blizzard, so they slapped Blizzard's name on it instead.
present day... present time... hahahaha...
They made it sound like merging these two companies is somehow increasing the number of competitors in the market.
Previously, there were three big companies, EA, Activision, and Blizzard.* They were all competitors. Now, there are only two: EA and Activision-Blizzard. That does not benefit consumers. The already-existing cartel has just shrunk, moving even closer to a monopoly.
The benefits of capitalism (low prices, high quality, variety of choice, available jobs, economic health, etc...) all come to fruition in free markets with lots of competitors. When you have largely controlled markets (high barriers to entry) with very few competitors, you lose those benefits. This is Econ-101 stuff.
Whenever these mergers happen they always try to sell up the benefits to customers "by centralizing our efforts we can cut our own production costs greatly, which means we can provide better quality and even bigger savings on to our clients." While that is true in theory, in practice the lack of competition means there is nothing forcing them to provide these benefits, and so over time they don't provide them...and instead maximize their own profits by cutting corners on quality and price gouging. Merging eliminates the balancing factors in the market, which is what allows them to get away with this.
So that is what will happen. And it is nothing new. "All this has happened before. All this will happen again." --Pythia
*Yes, I am aware that there are actually other companies in the games industry at the moment...I was just filtering the set to those mentioned in the summary for the sake of simplicity. The principle still applies.
The "games of yore" mindset is just another "back in my day" phenomenon. The kids who grew up gaming are getting older now. It's just a sad fact of reality that the when I think about all the awesome games I played as a kid, I'm looking at them through rose-colored glasses. Most, truth be told, had simplistic gameplay that I wouldn't enjoy now. That "magic" that the old games had was essentially that a lot of us were kids who were easily entertained. A little guy to move around on screen and some flashing lights and we were happy. I mean honestly, RC Pro Am or Contra aren't much more than twitchy little diversions.
These days, game companies are still coming out with tons of those types of boring, meaningless games. The kids now are eating them up, and we look at them with disdain saying "If only they had some REAL games like WE had when we were kids . . . uphill in the snow both ways yadda yadda". Don't get me wrong, I'm still an avid gamer, but I'm just much more selective now that I used to be. In generally I'll play through half a dozen games per year, but they're not the mindless little diversions that I once enjoyed. Now, it takes a very detailed game with an intricate story to wrap me in. Last full game I played through was Mass Effect. Currently I'm in the beginning stages of Assassin's Creed (which is decent so far).
So yeah, the games haven't gotten lower in quality as time has weathered on - it's just that our demands for them have gone up as we've gotten older.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
First stop thinking about EA\Activision\etc as game companies. They are at the core Interactive Entertainment companies.
Just as Marvel is no longer a comic book publisher, they deal in intellectual property. Their product is the world and characters they create and the various outlets are the tools (comics, movies, games, etc.)
With that in mind Activision and EA are looking at entertainment resources. The reason for the mergers is to pool capital for large projects that are internal and self directed.
Case in point, how many good video game movies are there?
Ok with that answer in mind: How many of them were produced by the game company?
Ahh we are starting to see the motivation here.
Blizzard alone, despite being a large high quality producer of games doesn't have all the tools they need to push things to the next level. The inverse is also true Activision doesn't have the tools that Blizzard has.
We all know there is a Warcraft movie in the works. The more money that Blizzard can front in the production, the more control. If they could fund the movie completely, they have complete control.
This is what motivated Marvel to start doing their own movies. Look at Marvel based movies before they spun their own studio (Hulk, Daredevil, Ghost Rider, Electra, etc.) and look at the post results in Iron Man.
By combining resources they are given themselves better leverage for a complete Entertainment company with better cross platform capitalization of their intellectual properties.
ActivisionBlizzard can do more with existing IPs then Blizzard alone can. Remeber, business is just as much about networking personally then just the logistics of business-as-usual. Activision brings a lot of "Who to call for XYZ" and "So-and-So over at Paramount owes me a favor".
The same goes the opposite way, Activision can now dip into the substantial talent pool that Blizzard has, their biggest asset is their art department. Think of all the artists who can now branch out and do work for other IPs not getting burned out drawing their 400th Orc or 200th Zerg. Retaining talent isn't jsut about good benefits, but giving them something to do that keeps them energized.
The key is ensuring good management, keeping the creative forces insulated against the business lines, and ensuring that creativity and profitability co-exist as peacefully as possible. That takes strong leadership to say yes and no when needed.
That being said I would love to see some new use of the WoW IP, how about a racing game in the theme of Rally car racing through Azeroth and Outland. How about some FPS in the land of Starcraft. How about a few anime series based on Starcraft, Diablo, and Warcraft?
Maintain quality, respect the IP, keep focused and keep costs in control.
-=[ Who Is John Galt? ]=-