Video game firms in $18 billion deal

US-based Activision and French-owned Blizzard are set to merge in a deal which could create the world’s largest video games publisher. The companies are renowned for hit titles such as World of Warcraft, Call of Duty and Guitar Hero.

As part of the merger, Blizzard will invest $2 billion in the new group, while Activision will invest $1 billion. The new group will be re-branded Activision Blizzard and its chief executive will be Activision’s current CEO Bobby Kotick. The 2 companies are are hoping that their different strengths will combine to form a business which is powerful on every gaming platform.

Blizzard, owned by the French media group, Vivendi, is a major player in online gaming and Warcraft is the world leader of what are known as massively multi-player online role-playing games, or MMORPGs. Currently, 9 million people pay a monthly subscription to play World of Warcraft.

Blizzard has a strong presence in Asia, where its Starcraft series has been extremely popular. Starcraft, a strategy game first released in 1998, is played by millions of South Koreans in gaming cyber-cafes and by professional gamers on television.

Activision has developed a presence on all 3 new generation game consoles, Microsoft’s Xbox 360, Sony’s PlayStation 3 and the Nintendo Wii with franchises such as Spider-Man and X-Men.

The company was formed in 1979 and underwent a series of alliances and mergers and bankruptcy before achieving the success it has today.

Vivendi’s chief executive, Jean-Bernard Levy, said this alliance is a major strategic step for Vivendi and is another illustration of our drive to extend our presence in the entertainment sector. By combining Vivendi’s games business with Activision, we are forming a worldwide leader in a growing industry.

Vivendi will be the biggest shareholder in the group.

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