Sorry, I don’t know how I missed this news for two days.
Activision, maker of the hit series Guitar Hero, is merging with Vivendi Universal Games, which owns Blizzard, maker of World of Warcraft. Blizzard, as I’ve posted here previously, is in my opinion the best video game studio of the past decade, bar none.
According to this New York Times article, the combined gian will roughly match Electronic Arts in revenue and size:
The deal announced Sunday will essentially leave Electronic Arts neck-and-neck with the newly combined entity, called Activision Blizzard (named for the biggest studio at Vivendi Games, Blizzard Entertainment). Electronic Arts is projected to have around $3.7 billion in sales this year, while executives of the merging companies said Activision Blizzard should have around $3.8 billion.
Investors seemed to applaud the deal. Activision’s stock was up 20.7 percent for the week on Tuesday at $26.74. Vivendi said it would pay $1.7 billion, or $27.50 a share, and wind up with a 52 percent stake in Activision Blizzard.
The deal is a little worrisome to me, given the fact that Activision has had significant ups & downs in its history. Blizzard, on the other hand, seems to bat 1000 year after year with every game they release. (I am soooo looking forward to Starcraft 2 in 2008)
This part of the article gave me pause:
“Activision has more M.B.A.’s per square inch than anybody,” said Michael Pachter, an analyst with Wedbush Morgan Securities. He argued that Mr. Kotick had taken a disciplined approach to running Activision, almost in the spirit of a packaged goods company like Procter & Gamble. “They run the company like a business.”
Is that a good thing? Really? Call me a hypocrite (since I do, in fact, have an MBA), but something about this line gave me the shivers. In fact, just re-reading it now gives me the shivers.
More MBA’s per square inch than anybody.
Ugh. That cannot be a good thing for a video game company. I’m not sure that’s good thing for any company outside an investment bank, private equity firm, or a management consulting firm.
It’s like I just felt their ability to recruit rock star engineers fall through the floor. Can you imagine the pitch:
Recruiter: “Come join our engineering team! We have free drinks, video games, great benefits, stock options, and more MBA’s per square inch than anyone else!”
Engineer: “That sounds… ew. oh. geez. sorry. You’re breaking up. I’ll call you right back.”
4 thoughts on “Activision Blizzard: New Video Game Giant, More MBA’s per Square Inch?”
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In the African Savannah, 200 square miles are required to support 1 lion. Any more population density and the lions will become territorial and fight each other.
Same with MBAs. Population Density needs to be controlled.
That said, I’ve had experience with 2 video game companies, both fairly well known and I can report that any sort of financial discipline was missing. Certainly a few companies can benefit from structured thinking like target market analysis, a bit of ROI discussion prior to investment. proper product management scheduling to prevent burnount, and god willing a bit of leadership and management talent.
Blizzard seems to be doing pretty darn well, though, so I wonder why the sell out.
Great post Adam. Made me shudder as well.
I was wondering if you would mind our using a quote from this blog in an article we’re putting together regarding the relevance of MBAs to a career in digital.
We would of course highlight that this is your personal blog, but you capture a point that an MBA may not be as relevant to the digital media as it is in the financial sector that fits into our narrative perfectly.
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