Essay on Activision Blizzard Merger Case Study Analysis

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CASE 3-8: The Activision Blizzard Merger
In December of 2007 the merger of Activision and Blizzard was announced. Blizzard Entertainment, one of four divisions of Vivendi games, was the key ingredient for synergy between the two firms. First, an introduction to the video game software industry is pertinent. This will be followed by some discussion regarding the major trends and major players in the industry. Second, some insight will be provided on the merging companies, Activision and Blizzard. Third, the potential value of the merger will be explored, along with some analysis of the partnership. Lastly, I will give my personal views of the merger itself.
The Industry, domestically the video game software industry was worth $9.5 …show more content…

Activision Pre-merger: Activision was a leading developer and publisher of video game software for consoles. Its top titles include Guitar Hero, Tony Hawk, and Call of Duty, all of which have multiple games in their series. The company itself was moderately vertically integrated, with ownership of some development, publishing, and distribution activities. Its strengths lie in its growth strategies; partnerships allowed the firm to exclusive rights to certain brands. Other strengths include leading game titles for multiple platforms, hit sequels that are less capital intensive to develop, a stringent “green light” process for quality control, ability for online game play, and divisions in over a dozen countries. Weaknesses include lack of existence in foreign markets, lack of PC software development techniques, and the fact that licensed content is vulnerable to competition. The opportunities available are sequels to already established titles, growth in industry, and future partnerships based on their good reputation with previous alliances. Threats include competition from other software developers like THQ and Take-Two, the cyclical nature of releases, and the reliance on game consoles for use of software.
Blizzard Pre-Merger: Strengths for the Company include top performing titles manufactured for use on computers, reoccurring revenues based on subscriptions, and a presence in the hard to penetrate Asian market.

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