| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
Bloomberg reports that president of Activision Publishing Mike Griffith, the company's third highest executive, said:
Activision has a strong track record when it comes to M&A, so the news isn't entirely shocking. Video game blog Joystiq wrote of the news: "Let's remember, when Activision really uses its cash, it grabs multi-million dollar franchises or merges into multi-billion dollar corporations." Joystiq was alluding to Activision's Red Octane and Vivendi games deals. Activision's Red Octane purchase in 2006 helped it book $1 billion in sales from "Guitar Hero" games since the deal's closing, according to its 2008 annual report. Meanwhile, the $19 billion merger with Vivendi's games unit in 2007 helped propel its revenues ahead of chief rival Electronic Arts Inc. (NASDAQ:ERTS), and secured it such titles as "World of Warcraft," which came with some lucrative subscription revenue. But who might Activision purchase? While most blog writers refrained from direct suggestions, their readers were more than happy to point out a few names. The most popular suggestion that dovetails with Griffith's comments about cheap intellectual property is buying bankrupt Midway games primarily for its "Mortal Kombat" fighting game franchise. While championed by commenters, it also received a vote of confidence from Silicon Alley Insider. Another popular suggestion among commenters is Take Two Interactive Software Inc. (NASDAQ:TTWO), which last year spurned an unsolicited bid from Electronic Arts. While EA would have paid about $1.9 billion, Take Two's market cap has fallen to $464 million as it trades near its 52-week low of $5.56 a share, meaning Activision could possibly secure the "Grand Theft Auto" franchise. The franchise's fourth installment generated $500 million in its first week of sales last year. Perhaps Activision could get it for less than the revenue the next installment of the series might generate. Indeed, a Take Two purchase based on GTA sales alone might resemble the lucrative Red Octane deal. Adding to the value proposition of such a deal is the fact that Take Two would help Activision fill the void in its portfolio of sports and racing franchises -- rival EA's big money makers. A Take Two-Activision deal seems like a no-brainer. Another suggestion is for Activision to purchase struggling THQ Inc. (NASDAQ:THQI), which reportedly is near bankruptcy. Perhaps THQ's lack of strong intellectual property -- the company generates most of its revenues by licensing properties from World Wrestling Entertainment Inc. (NYSE:WWE) , Walt Disney Co. (NYSE:DIS) and Viacom Inc. (NYSE:VIA) -- makes it a bad buy even if its market cap of $165 million makes it a cheap purchase. However, bloggers may be overlooking the potential value of THQ's budding franchise "Saints Row," which is a "Grand Theft Auto" clone. Under Activision's tutelage, it could flourish, but could it make enough money to recoup the asking price? Yet another suggested target is Chinese game publisher The9 Ltd. (NASDAQ:NCTY), proposed by a commenter on Barron's Tech Trader Daily blog. The suggestion bucks the obvious U.S. names of console game publishers, and looks to a growing market that loves online games akin to Activision's "World of Warcraft" franchise. In fact, The9 seems like a natural fit for Activision's Blizzard business if it weren't for the fact that EA owns a 15% stake in it, making a purchase somewhat unlikely. - Matthew Wurtzel
Categories Deal Video
    Community
 Elsewhere on The Deal.comDealwatch
The Deal MagazineCorporate Dealmaker
The Deal VideoCategories
Blog roll
Archives
| |||||||||||||||||||||||||
Video game publisher Activision Blizzard Inc. (NASDAQ:ATVI) has put its quarters on the screen as it reportedly is preparing to spend some of its $3 billion in cash on acquisitions. 
|
|
|
|
|
