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This past week, it was revealed that Vivendi Entertainment was seeking a possible buyer for the publishing powerhouse, Activision Blizzard. According to reports, the company was looking into three different possible suitors, Tencent, Time Warner, and Microsoft. The company is reportedly asking $10 billion for the deal.
Many gamers expressed that they thought that the deal was a good thing for Microsoft, as it would give them access to a stable of IPs that they could utilize in gaining an advantage in the console market. Some expressed that having Blizzard in their corner would allow Microsoft to become a player in the PC publishing department. I on the other hand believe that this is a bad idea for Microsoft for a number of reasons.
For starters, Microsoft already has a publishing department within the company, and they have been fairly successful this generation. In order to make this work, Microsoft would either need to let Activision Blizzard operate as a separate entity publishing on all consoles (which I don't see happening, as it takes away Microsoft's advantage with purchasing), or they would have put the logistics in place to accommodate all three publishing bodies, as Activision and Blizzard operate autonomously, with minimal meddling from the board of directors in Blizzard's affairs. This would cause a greater cost to Microsoft than just the $10 billion because they would have to place personnel in order to oversee the publishers that, just aren't there now. It would become a logistical problem, but other issues further complicate this one problem.
Blizzard's autonomy has been at the forefront of any deals they have had. With the merger between Activision and Blizzard, the biggest stipulation was that Blizzard would be able to continue to operate as they wished, and no one from Activision would be allowed to meddle in this. For all the evil that gamers feel he has committed, Bobby Kotick has honored this arrangement to this point. Yet one has to wonder if Microsoft would be able to resist meddling. After all, by acquiring Blizzard, they would have the means to make their PC distribution service a premiere service by making Blazzard's games exclusive. If Blizzard felt that Microsoft were meddling, several key members of Blizzard would be likely to leave the company, decreasing the value of Blizzard and limiting Microsoft's return on the deal.
To the Activision side, Call of Duty and Skylanders are the two biggest IPs that they currently possess. The problem in potentially making these games exclusive is that they have such a major market hold due to their ability to publish on all consoles. If Call of Duty were to become exclusive to Microsoft, they would be losing out on roughly 10 million sales. Skylanders would be even worse off, according to vgchartz.com (not the best source, but the only that tracks games sales by console), who show the Wii as the best selling console for the Skylanders game. Making Skylanders exclusive to the 360, would lose over half of its total sales, completely neutering the benefit of obtaining this IP.
The absence of Call of Duty on the Playstation 3 would result in another consequence that would be bad for the series. Without Call of Duty's presence, EA would have free reign with the Battlefield and Medal of Honor series, being able to grow them into greater successes than the Call of Duty series reached. This would likely have a transferable effect upon Call of Duty on the 360, as it would not have the brand awareness it does now. This would further diminish the value of the IP.
As you can see, it is hard to imagine a scenario where this would be a good move for Microsoft. All signs point toward Activision Blizzard only depreciating in value under Microsoft. For a company to make a deal such as this, they would have to know that they could make their money back, plus additional returns, and I just can't see this happening with an acquisition of Activision Blizzard. Perhaps this is why later in the week, it was announced that Vivendi was having trouble finding a buyer. I would certainly hope Microsoft would put in enough thought to realize that this would not be to their benefit at all.
Yeah, that sounds like it won't work. It's just too much to manage, and it would hurt the sales of their series.
You're very right. Activision's strength over, say, Halo, is that all Activision games are muliplatform. Making Call of Duty an exclusive would be disastrous.
It would be a good deal for Microsoft IF it wouldn't cost so much just to acquire Activision Blizzard. Having those series exclusively on Xbox would be great but that's also never been Microsoft's style. It seems most likely that Vivendi will somehow work out a deal with Activision to let the company take complete control.
You make valid points.