Kotaku: activision blizzard

Before Activision Blizzard, A $650 Million Q1

Leigh Alexander — Mon, 14 Jul 2008 15:20:00 MDT

Activision's no longer just Activision anymore; as of last week, it's Activision Blizzard from here on out. But over the last fiscal quarter while it was still just Activision, the company pulled in $650 million in revenues, topping its own estimation of $500 million. This first fiscal quarter of 2009 was the publisher's highest non-holiday quarter on record, said Activision Blizzard president and CEO Bobby Kotick.

Kotick also said he was looking forward to the possibilities ahead now that the combination with Vivendi is finalized.

Full announcement after the jump.

SANTA MONICA, Calif., Jul 14, 2008 (BUSINESS WIRE) — Activision Blizzard, Inc. (Nasdaq: ATVID) today announced that Activision's stand-alone preliminary financial results for the first quarter of fiscal year 2009, which ended on June 30, 2008, prior to the closing of the transaction with Vivendi, on July 9, 2008, were higher than Activision's previously provided first quarter outlook.

For the fiscal first quarter, Activision expects record net revenues of approximately $650 million and earnings per diluted share between $0.16 and $0.18, an increase from Activision's prior outlook of $500 million in net revenues and earnings per diluted share of $0.04 on a stand-alone basis.

Excluding the expected impact of expenses related to equity-based compensation of $0.02 per diluted share and expected one-time costs of $0.03 per diluted share related to the business combination between Activision and Vivendi Games, Activision's stand-alone non-GAAP earnings per diluted share are expected to be between $0.21 and $0.23 per diluted share, as compared to Activision's prior non-GAAP outlook of $0.13 per diluted share which had excluded $0.02 per share for expenses related to equity-based compensation and $0.07 per share for one-time costs related to the business combination between Activision and Vivendi Games.

Activision's performance was driven by the North American launch of Kung Fu Panda early in the quarter, which was the largest launch of a DreamWorks Animation licensed property by Activision. Late in the quarter, Activision had two record setting North American launches from the Guitar Hero franchise - Guitar Hero: On Tour, which was the largest North American launch for the Nintendo DS(TM) in Activision's history and Guitar Hero: Aerosmith, which ranked as one of Activision's top-five North American multiplatform launches.

"Activision's first quarter stand-alone net revenues and earnings were the highest ever for a non-holiday quarter," stated Robert Kotick, President and CEO of Activision Blizzard, Inc. "Our significant overperformance in Q1 would have further added to our previously given stand-alone fiscal 2009 net revenues and earnings outlook, making it by far the largest and most profitable year in Activision's history. As we have recently closed our transaction with Vivendi Games, we will be providing an outlook for Activision Blizzard as a combined company moving forward."

Kotick continued, "We are extremely excited about the additional possibilities created by the completion of our combination with Vivendi Games last week and remain very optimistic about the long-term opportunities. Both Activision and Blizzard Entertainment's businesses have maintained their momentum and Activision Blizzard is well positioned to exceed the financial goals set for the combined company."

Activision Blizzard Opens Its Doors With A Stock Split

Leigh Alexander — Fri, 11 Jul 2008 12:30:00 MDT

Activision Blizzard inaugurated itself with the announcement of a two-for-one stock split for investors, a sign that its outlook is rosy. When a company is doing rather well, it often splits its stock - doing so effectively doubles the number of shares that each investor holds.

This is usually a move companies make when their value is high relative to other companies in its sector — halving the share price means more investors may be willing to buy in, while existing investors won't have the value they hold diluted by the increased number of shares.

"This action reflects our strong financial position and our confidence in the opportunities for further growth," said Bobby Kotick, president and CEO of Activision Blizzard. "We believe the stock split will lead to wider ownership by making our stock accessible to a broader base of investors."

Full announcement after the jump.

Activision Blizzard Announces Two-for-One Stock Split
Split to Take Effect Post Tender Offer of Activision Blizzard

SANTA MONICA, Calif., Jul 11, 2008 (BUSINESS WIRE) — Activision Blizzard, Inc. (Nasdaq: ATVI) announced today that its Board of Directors approved a two-for-one stock split of its outstanding shares of common stock to be effected in the form of a common stock dividend.

Stockholders will receive one additional share for each share of common stock held on the record date. The company expects that the record date for the stock split will be a date shortly after the closing of the company's previously announced self tender offer. Additional information regarding the stock split, including announcement of the record date, will be provided by the company following completion of the tender offer.

"This action reflects our strong financial position and our confidence in the opportunities for further growth," said Robert Kotick, President and CEO of Activision Blizzard. "We believe the stock split will lead to wider ownership by making our stock accessible to a broader base of investors."

About Activision Blizzard

Headquartered in Santa Monica, California, Activision Blizzard, Inc. is a worldwide pure-play online and console game publisher with leading market positions across all categories of the rapidly growing interactive entertainment software industry.

Activision Blizzard maintains operations in the U.S., Canada, the United Kingdom, France, Germany, Ireland, Italy, Sweden, Spain, Norway, Denmark, the Netherlands, Romania, Australia, Chile, India, Japan, China, the region of Taiwan and South Korea. More information about Activision Blizzard and its products can be found on the company's website, www.activisionblizzard.com.

Cautionary Note Regarding Forward-looking Statements: Information in this press release that involves Activision Blizzard's expectations, plans, intentions or strategies regarding the future are forward-looking statements that are not facts and involve a number of risks and uncertainties. Activision Blizzard generally uses words such as "outlook", "will," "remains," "to be," "plans," "believes", "may", "expects," "intends," and similar expressions. Factors that could cause Activision Blizzard's actual future results to differ materially from those expressed in the forward-looking statements set forth in this release include, but are not limited to, sales of Activision Blizzard's titles in its fiscal year 2009, shifts in consumer spending trends, the seasonal and cyclical nature of the interactive game market, Activision Blizzard's ability to predict consumer preferences among competing hardware platforms (including next-generation hardware), declines in software pricing, product returns and price protection, product delays, retail acceptance of Activision Blizzard's products, adoption rate and availability of new hardware and related software, industry competition, rapid changes in technology and industry standards, protection of proprietary rights, litigation against Activision Blizzard, maintenance of relationships with key personnel, customers, vendors and third-party developers, domestic and international economic, financial and political conditions and policies, foreign exchange rates, integration of recent acquisitions and the identification of suitable future acquisition opportunities, Activision Blizzard's success in integrating the operations of Activision and Vivendi Games in a timely manner, or at all, and the combined company's ability to realize the anticipated benefits and synergies of the transaction to the extent, or in the timeframe, anticipated. Other such factors include the further implementation, acceptance and effectiveness of the remedial measures recommended or adopted by the special sub-committee of independent directors established in July 2006 to review the company's historical stock option granting practices, the finalization of the tentative settlement of the SEC's formal investigation and final court approval of the proposed settlement of the derivative litigation filed in July 2006 against certain current and former directors and officers of Activision Blizzard relating to Activision Blizzard's stock option granting practices, and the possibility that additional claims and proceedings will be commenced, including additional action by the SEC and/or other regulatory agencies, and other litigation unrelated to stock option granting practices and any additional risk factors identified in Activision Blizzard's most recent annual report on Form 10-K and quarterly reports on Form 10-Q and the definitive proxy statement filed on June 6, 2008 in connection with the Vivendi transaction. The forward-looking statements in this release are based upon information available to Activision Blizzard as of the date of this release, and Activision Blizzard assumes no obligation to update any such forward-looking statements. Forward-looking statements believed to be true when made may ultimately prove to be incorrect. These statements are not guarantees of the future performance of Activision Blizzard and are subject to risks, uncertainties and other factors, some of which are beyond its control and may cause actual results to differ materially from current expectations.

Activision First Tried To Buy Blizzard

Luke Plunkett — Fri, 11 Jul 2008 04:30:00 MDT

Activision Blizzard, that's a big company right there. And, technically, it's a merger. But things could have been so, so different. Instead of a union, it could have been a buy-out, with Activision originally interested in straight-up purchasing the WoW creators. Says Activision boss Bobby "What, Me Worry?" Kotick:

We talked about the opportunity to buy Blizzard and they were adamant that they loved the [videogame] business and were committed to it. They didn't want to sell the business but would entertain other ideas. They were struggling on the console side and needed to diversify into other parts of the business and recognized how difficult that would be independently, which is how we ultimately settled on this structure.

Ah, the structure where Blizzard execs get fat new paychecks while Activision gets a piece of WoW's cash flow? Everybody wins!

Activision tried to buy Blizzard before merging with Vivendi Games [Variety]

Activision Under The Impression They Can Challenge iTunes

Luke Plunkett — Fri, 11 Jul 2008 02:00:00 MDT

Activision Blizzard have around $3.5 billion in cash lying around after the merger between the two companies. Where's it going to go? Who knows. Some of it on fancy new office stationary, probably. Some on getting fair trade organic coffee sold at the company cafeteria. And some on this brave endeavour: Acti boss Bobby Kotick thinks that, between the franchise's popularity and Vivendi's ownership of Universal Music, Guitar Hero as a platform could someday become a music download service to rival iTunes. Sounds fairly ridiculous considering said service would be for a game using plastic instruments rather than one allowing you to buy music for your music player, but whatever. It's your $3.5 billion, Bobby.

Activision to launch rival to iTunes [Yahoo]

Activision Lock Blizzard, Infinity Ward Bosses To Long-Term Deals

Luke Plunkett — Thu, 10 Jul 2008 21:40:00 MDT

Newly-merged Activision Blizzard are the world's #1 publisher for a reason. Well, four reasons: World of Warcraft, Tony Hawk's, Call of Duty and Guitar Hero. So with the ink only just drying on the Activision/Blizzard merger, it makes sense for the new company to move to secure the talent behind those games. Variety reports that all the "top execs" at Blizzard have been signed to new, five-year deals, company boss Robert Kotick saying "We realized it would be impossible to compete [with 'World of Warcraft'] and so ultimately my only issue was making sure they were committed for at least five years". Smart move. The heads of Infinity Ward and Neversoft have also been signed to new deals, locking in most of the new mega-publishers top talent. Here's to five more uninterrupted years of Guitar Hero and Call of Duty!

Blizzard, Infinity Ward, Neversoft execs sign long term contracts with Activision Blizzard [Variety]

Activision Blizzard Merger Finalized

Leigh Alexander — Thu, 10 Jul 2008 14:20:00 MDT

When yesterday over 92 percent Activision shareholders gave their thumbs-up to the company's pending merger with Vivendi, it was pretty much a done deal, and today Activision Blizzard is official.

Board chairman Rene Penisson said he's "delighted that the merger is completed," and that the new company is "determined to 'think big!'"

The merger was first announced in December of 2007. Through it, Blizzard and Sierra parent Vivendi becomes a wholly-owned subsidiary of Activision, scoring 295.3 new shares of Activision stock. It'll also buy 62.9 million new shares for a total of $1.7 billion - the result is that Vivendi owns a stake of about 52 percent in its new parent company.

Announcement follows the jump.

Vivendi and Activision Complete Transaction to Create Activision Blizzard
World's Most Profitable Pure-Play Online and Console Game
Publisher

Cash Tender Offer for Up to 146.5 Million of Activision Blizzard
Shares at $27.50 Per Share to Commence Within Five Business Days

Vivendi Owns 52% on a Fully Diluted Basis/54% of Outstanding
Shares of Activision Blizzard

PARIS & SANTA MONICA, Calif., Jul 10, 2008 (BUSINESS WIRE) — Vivendi (Euronext Paris: VIV) and Activision, Inc. (Nasdaq: ATVI) today announced the completion of the transaction announced on December 2, 2007 to create Activision Blizzard, as the world's most profitable pure-play online and console game publisher. Activision Blizzard was formed by combining Activision, one of the world's leading independent publishers of interactive entertainment, and Vivendi Games, Vivendi's interactive entertainment business, which includes Blizzard Entertainment's(R) World of Warcraft(R), the world's #1 subscription-based massively multiplayer online role-playing game. Activision Blizzard will continue to operate as a public company traded on Nasdaq under the ticker ATVI.

Jean-Bernard Levy, CEO of Vivendi, said: "We have created the world leader in online and console games with this transaction and the combined strengths of the two businesses offer immense growth potential. I am also very confident that, with the new leadership team in place, the new entity is perfectly positioned to take advantage of these rapidly developing markets across the globe."

Rene Penisson, Chairman of Activision Blizzard, added: "We are delighted that the merger has been completed. We are very excited about the opportunity for Activision Blizzard to create a broader entertainment software platform. We are leaders across North America and Europe and are creating a substantial footprint in the rapidly growing Asian market. We are determined to 'think big'!"

"The completion of this transaction marks the beginning of an important new chapter in the history of interactive entertainment," said Robert Kotick, President and Chief Executive Officer of Activision Blizzard. "By combining leaders in mass-market entertainment and subscription-based online games, Activision Blizzard has leading market positions across all categories of the rapidly growing interactive entertainment software industry. With more than 10.7 million subscribers on World of Warcraft, and with tens of millions of people playing Guitar Hero, Activision Blizzard's games are transcending the traditional stereotypes and are more popular as a form of entertainment than ever before. We look forward to building upon our brands to create value for our shareholders, customers and consumers."

"From the beginning, our goal has been to make the best games in the world, and this transaction strengthens our ability to do just that," said Mike Morhaime, Blizzard Entertainment cofounder and Chief Executive Officer. "As part of Activision Blizzard we'll have the reach and resources to share our games with an even wider audience — while maintaining the same approach as always to providing high-quality entertainment and services to our players."

In addition to World of Warcraft, the #1 subscription-based massively multiplayer online role-playing game, the transaction brings together some of the world's leading interactive entertainment franchises including Guitar Hero(R), the #1 family entertainment and #1 music-based franchise; Call of Duty(R), the #1 first-person action franchise; Tony Hawk, the #1 action sports franchise; Spider-Man, the #1 Super Hero franchise; Cabela's(R), the #1 sports hunting franchise; and two of the top-ten kids movie-based franchises, Shrek and Madagascar(TM), for calendar year 2005 through 2007 according to the NPD Group, Chart Track and The GFK Group.

The transaction was approved by Activision's stockholders at a special stockholder meeting on July 8, 2008 and closed on July 9, 2008.

Structure and Terms of the Transaction

Under the terms of the agreement, Vivendi Games merged with a wholly owned subsidiary of Activision and shares of Vivendi Games were converted into approximately 295.3 million new shares of Activision common stock. Concurrently with the merger, Vivendi purchased approximately 62.9 million newly issued shares of Activision common stock at a price of $27.50 per share for a total of approximately $1.7 billion in cash, resulting in a total Vivendi ownership stake in Activision Blizzard of approximately 52% on a fully diluted basis and approximately 54% of shares outstanding.

In accordance with the terms of the agreement, within five business days of the closing of the transaction, Activision Blizzard will launch a $4 billion all-cash tender offer to purchase up to 146.5 million Activision Blizzard common shares at $27.50 per share. To the extent that Activision's stockholders participate in the tender offer, the tender offer may be funded with Activision Blizzard's available cash on hand at closing, borrowings made under credit facilities from Vivendi, and proceeds from the issuance of additional shares to Vivendi for up to $700 million. If the tender offer were fully subscribed, Vivendi would own an approximate 68% ownership stake in Activision Blizzard on a fully diluted basis.

The transaction is expected to be immediately accretive in its first year post-closing for Activision's stockholders on a non-GAAP basis excluding equity-based compensation, one time costs related to the transaction, the impact of purchase price accounting related adjustments including amortization of intangibles, and the impact of the change in deferred net revenues and cost of sales related to online-enabled games.

Both Activision and Blizzard Entertainment's businesses have maintained their momentum and Activision Blizzard is well positioned to exceed the financial goals set for the combined company at the time of the deal announcement.

Board & Management

The Board of Directors of Activision Blizzard consists of eleven members: six directors designated by Vivendi, two Activision management directors and three independent directors from Activision's board of directors. Rene Penisson, a member of the Management Board of Vivendi and Chairman of Vivendi Games, will serve as Chairman of Activision Blizzard. Brian Kelly, Co-Chairman of Activision, will serve as Co-Chairman of Activision Blizzard. The three independent directors are Richard Sarnoff, Robert J. Corti and Robert Morgado. Other Activision Blizzard directors will be Robert Kotick (President and Chief Executive Officer of Activision Blizzard), Bruce Hack (Vice-Chairman and Chief Corporate Officer of Activision Blizzard), Jean-Bernard Levy (Chairman of the Management Board and Chief Executive Officer of Vivendi), Doug Morris (Member of the Management Board of Vivendi and Chairman and Chief Executive Officer of the Universal Music Group), Philippe Capron (Member of the Management Board and Chief Financial Officer of Vivendi), and Frederic Crepin (Senior Vice President, Head of Legal Department of Vivendi).

Activision Blizzard is drawing on an accomplished group of leaders from both companies: Robert Kotick is President and Chief Executive Officer of Activision Blizzard. Mike Griffith is serving as President and Chief Executive Officer of Activision Publishing, which includes the Sierra Entertainment, Sierra Online and Vivendi Games Mobile divisions in addition to the Activision business.

Bruce Hack, who served as Chief Executive Officer of Vivendi Games, is Vice-Chairman and Chief Corporate Officer of Activision Blizzard, accountable for leading the merger integration and the finance, human resources and legal functions. Blizzard Entertainment cofounder, Mike Morhaime, will continue to serve as President and Chief Executive Officer of Blizzard Entertainment. Thomas Tippl, formerly Chief Financial Officer of Activision Publishing, has been appointed Chief Financial Officer of Activision Blizzard and Jean-Francois Grollemund, Chief Financial Officer of Vivendi Games, has been appointed Chief Merger Officer of Activision Blizzard.

Portfolio of Video Games and Franchises

Activision Blizzard's portfolio includes best-selling video games such as Guitar Hero(R), Call of Duty(R), and Tony Hawk, as well as Spider-Man(TM), X-Men(TM), Shrek(R), James Bond(TM) and TRANSFORMERS(TM), leading franchises such as Crash Bandicoot(TM) and Spyro(TM) and Blizzard Entertainment's(R) StarCraft(R), Diablo(R), and Warcraft(R) franchises including the global #1 subscription-based massively multi-player online role-playing game, World Of Warcraft(R).

About Activision Blizzard

Activision Blizzard maintains operations in the U.S., Canada, the United Kingdom, France, Germany, Ireland, Italy, Sweden, Spain, Norway, Denmark, the Netherlands, Romania, Australia, Chile, India, Japan China, Taiwan and South Korea. More information about Activision Blizzard and its products can be found on the company's website, www.activisionblizzard.com.

Important Additional Information has been and will be filed with the SEC

THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL ANY SECURITIES. THE SOLICITATION AND THE OFFER TO BUY SHARES OF ACTIVISION BLIZZARD'S COMMON STOCK WILL ONLY BE MADE PURSUANT TO AN OFFER TO PURCHASE AND RELATED MATERIALS THAT ACTIVISION BLIZZARD INTENDS TO FILE WITH THE SEC. ONCE FILED, ACTIVISION BLIZZARD STOCKHOLDERS SHOULD READ THESE MATERIALS CAREFULLY PRIOR TO MAKING ANY DECISIONS WITH RESPECT TO THE OFFER BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER. ONCE FILED, ACTIVISION BLIZZARD STOCKHOLDERS WILL BE ABLE TO OBTAIN THE OFFER TO PURCHASE AND RELATED MATERIALS WITH RESPECT TO THE OFFER FREE OF CHARGE AT THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV, OR FROM THE INFORMATION AGENT NAMED IN THE TENDER OFFER MATERIALS.

Cautionary Note Regarding Forward-looking Statements: Information in this press release that involves Activision Blizzard's expectations, plans, intentions or strategies regarding the future are forward-looking statements that are not facts and involve a number of risks and uncertainties. In this release, they are identified by references to dates after the date of this release and words such as "outlook", "will," "remains," "to be," "plans," "believes", "may", "expects," "intends," and similar expressions. Factors that could cause Activision Blizzard's actual future results to differ materially from those expressed in the forward-looking statements set forth in this release include, but are not limited to, sales of Activision Blizzard's titles in its fiscal year 2009, shifts in consumer spending trends, the seasonal and cyclical nature of the interactive game market, Activision Blizzard's ability to predict consumer preferences among competing hardware platforms (including next-generation hardware), declines in software pricing, product returns and price protection, product delays, retail acceptance of Activision Blizzard's products, adoption rate and availability of new hardware and related software, industry competition, rapid changes in technology and industry standards, protection of proprietary rights, maintenance of relationships with key personnel, customers, vendors and third-party developers, domestic and international economic, financial and political conditions, foreign exchange rates, integration of recent acquisitions and the identification of suitable future acquisition opportunities, Activision Blizzard's success in integrating the operations of Activision and Vivendi Games in a timely manner, or at all, and the combined company's ability to realize the anticipated benefits and synergies of the transaction to the extent, or in the timeframe, anticipated. Other such factors include the further implementation, acceptance and effectiveness of the remedial measures recommended or adopted by the special sub-committee of independent directors established in July 2006 to review historical stock option granting practices by Activision Blizzard and its board of directors, the finalization of the tentative settlement of the SEC's formal investigation and final court approval of the proposed settlement of the derivative litigation filed in July 2006 against certain current and former directors and officers of Activision Blizzard relating to Activision Blizzard's stock option granting practices, and the possibility that additional claims and proceedings will be commenced, including additional action by the SEC and/or other regulatory agencies, and other litigation unrelated to stock option granting practices and any additional risk factors identified in Activision Blizzard's most recent annual report on Form 10-K and quarterly reports on Form 10-Q and the definitive proxy statement filed on June 6, 2008 in connection with the proposed transaction with Vivendi. The forward-looking statements in this release are based upon information available to Activision Blizzard as of the date of this release, and Activision Blizzard assumes no obligation to update any such forward-looking statements. Forward-looking statements believed to be true when made may ultimately prove to be incorrect. These statements are not guarantees of the future performance of Activision Blizzard and are subject to risks, uncertainties and other factors, some of which are beyond its control and may cause actual results to differ materially from current expectations.

We Won't Be Seeing Brütal Legend At E3 :(

Michael McWhertor — Tue, 08 Jul 2008 19:00:55 MDT

Sunday night's pre-E3 Kotaku party is going to be a booze-fueled, feel-good adventure. None of that, however, will dull the pain of Brütal Legend's absence at E3, an absence confirmed by MTV Multiplayer today. Double Fine Productions frontman Tim Schafer confirmed the bad news earlier today and I'm just barely keeping it together.

Sure, we knew that Vivendi and Activision and their subsidiaries weren't doing the E3 thing proper, but Activision is at least holding a press conference. Chalk it up to denial. The good news, according to MTV, is that Mr. Schafer says we may hear more about it "soon after" E3. I'm ignoring Tim's "we hope" caveat.

We're also going to refer to the newly merged Activision Blizzard as Activision Blizzard Brütal Legend to show just how important we think the game is.

No ‘Brutal Legend’ At E3 [MTV Multiplayer]

Activision Blizzard Merger Official

Leigh Alexander — Tue, 08 Jul 2008 13:20:00 MDT

Activision has officially received shareholder approval for its merger with Vivendi. The company said over 92 percent of its shareholders greenlighted the merger, and the transaction is expected to officially close tomorrow.

The merger was first announced in December of 2007, but has just now been finalized. Through it, Blizzard and Sierra parent Vivendi becomes a wholly-owned subsidiary of Activision, scoring 295.3 new shares of Activision stock. It'll also buy 62.9 million new shares for a total of $1.7 billion - the result is that Vivendi owns a stake of about 52 percent in its new parent company.

Santa Monica-based Activision's new name will officially be Activision Blizzard, a moniker change also approved by the shareholders today, but it'll continue to trade on the NASDAQ under its same symbol, ATVI.

Full details after the jump.

Activision Stockholders Approve Combination with Vivendi Games

SANTA MONICA, Calif., Jul 08, 2008 (BUSINESS WIRE) — Activision, Inc. (Nasdaq: ATVI) today announced that, at a special meeting of stockholders held earlier today, it received the stockholder approval necessary to consummate the company's agreement with Vivendi, S.A. to combine Vivendi Games, Vivendi's interactive entertainment business, with Activision's businesses. All of the proposals required to effect the transaction received more than 92 percent of the shares voted. The transaction is expected to close on or around July 9, 2008.

Activision and Vivendi Games will combine their businesses through the merger of a newly formed, wholly-owned subsidiary of Activision with and into Vivendi Games. As a result of the merger, Vivendi Games, the parent company of Blizzard Entertainment and Sierra, will become a wholly-owned subsidiary of Activision. Vivendi will receive approximately 295.3 million newly issued shares of Activision common stock. Concurrently with the merger, Vivendi will purchase approximately 62.9 million newly issued shares of Activision common stock at a price of $27.50 per share for a total of approximately $1.7 billion in cash, resulting in a total Vivendi ownership stake in Activision Blizzard of approximately 52% on a fully diluted basis and approximately 54% of shares outstanding. As of the closing of the transaction, Activision will be renamed Activision Blizzard and will continue to operate as a public company traded on NASDAQ under the ticker ATVI.

Activision Blizzard maintains operations in the U.S., Canada, the United Kingdom, France, Germany, Ireland, Italy, Sweden, Spain, Norway, Denmark, the Netherlands, Romania, Australia, Chile, India, Japan China, the region of Taiwan and South Korea. More information about Activision Blizzard and its products can be found on the company's website, www.activisionblizzard.com.

Cautionary Note Regarding Forward-looking Statements: Information in this press release that involves Activision Blizzard's expectations, plans, intentions or strategies regarding the future are forward-looking statements that are not facts and involve a number of risks and uncertainties. In this release, they are identified by references to dates after the date of this release and words such as "outlook", "will," "remains," "to be," "plans," "believes", "may", "expects," "intends," and similar expressions. Factors that could cause Activision Blizzard's actual future results to differ materially from those expressed in the forward-looking statements set forth in this release include, but are not limited to, sales of Activision Blizzard's titles in its fiscal year 2009, shifts in consumer spending trends, the seasonal and cyclical nature of the interactive game market, Activision Blizzard's ability to predict consumer preferences among competing hardware platforms (including next-generation hardware), declines in software pricing, product returns and price protection, product delays, retail acceptance of Activision Blizzard's products, adoption rate and availability of new hardware and related software, industry competition, rapid changes in technology and industry standards, protection of proprietary rights, maintenance of relationships with key personnel, customers, vendors and third-party developers, domestic and international economic, financial and political conditions, foreign exchange rates, integration of recent acquisitions and the identification of suitable future acquisition opportunities, , the Activision Blizzard's success in integrating the operations of Activision and Vivendi Games in a timely manner, or at all, and the combined company's ability to realize the anticipated benefits and synergies of the transaction to the extent, or in the timeframe, anticipated. Other such factors include the further implementation, acceptance and effectiveness of the remedial measures recommended or adopted by the special sub-committee of independent directors established in July 2006 to review historical stock option granting practices by Activision Blizzard and its board of directors, the finalization of the tentative settlement of the SEC's formal investigation and final court approval of the proposed settlement of the derivative litigation filed in July 2006 against certain current and former directors and officers of Activision Blizzard relating to Activision Blizzard's stock option granting practices, and the possibility that additional claims and proceedings will be commenced, including additional action by the SEC and/or other regulatory agencies, and other litigation unrelated to stock option granting practices and any additional risk factors identified in Activision Blizzard's most recent annual report on Form 10-K and quarterly reports on Form 10-Q and the definitive proxy statement filed on June 6, 2008 in connection with the proposed transaction with Vivendi. The forward-looking statements in this release are based upon information available to Activision Blizzard as of the date of this release, and Activision Blizzard assumes no obligation to update any such forward-looking statements. Forward-looking statements believed to be true when made may ultimately prove to be incorrect. These statements are not guarantees of the future performance of Activision Blizzard and are subject to risks, uncertainties and other factors, some of which are beyond its control and may cause actual results to differ materially from current expectations.

Judge Delivers World Of Warcraft-Inspired Decision

Mike Fahey — Thu, 03 Jul 2008 09:20:00 MDT

If I had to have a favorite judge, chief judge of the Delaware Court of Chancery William B. Chandler III would be the man. Chandler is famous for his deep understanding of the cases he rules on, from referencing 50 Cent to channeling Ray Charles for an opinion on a Coca-Cola case (baby-uh huh). Issuing a decision on the case of the Wayne County Employees' Retirement System seeking an injunction against the Activision-Blizzard merger, Chandler got all kinds of World of Warcraft philosophical.

In some ways, perhaps, the world of Mergers and Acquisitions is a massively multiplayer role playing game as well. Like in World of Warcraft and other games, the participants in the M&A field take on certain roles, interact in their own community, hone specialized skills, and even develop a unique, somewhat curious vernacular. One particular quest in the world of M&A is disclosure litigation. In the instance of disclosure litigation presently pending before this Court, the world of M&A meets the World of Warcraft.

All I can see is a man in a business suit with a yellow exclamation point over his head. Hit the jump for Judge Chandler's stunning conclusion.

In the role-playing game that is this disclosure litigation, both sides have played their respective roles well. Plaintiff has vigorously battled for additional information about the proposed transaction, and, indeed, additional information has been released by the Company during the pendency of this litigation. Likewise, defendants have responsively and effectively addressed the many variations of claims that plaintiff has proffered. Ultimately, however, there still remained three outstanding disclosure claims for the Court to resolve. Like any game, this one has rules, and the most essential rule of disclosure is materiality. Because the plaintiff could not establish the materiality of its final three disclosure claims, the motion for a preliminary injunction is denied. The July 8, 2008 meeting may proceed. GAME OVER.

I love this man.

In Chandler Opinion, World of M&A Meets ‘World of Warcraft’ Video Game [The Wall Street Journal via Game Politics]

Activision Blizzard - World's Most Valuable Video Game Company

Mike Fahey — Wed, 11 Jun 2008 12:00:00 MDT

Now that Activision and Blizzard have a set a July date for their merger to be put up to final shareholder vote, it's time for the game industry analysts to do what they do best - analyzing. Lazard Capital analyst Colin Sebastian doesn't just think the joining of the two will form a big game company...he says they'll be the best, at least from a financial point of view.

"We believe the transaction is set to create a formidable new digital media powerhouse and the most valuable interactive entertainment company worldwide, unlocking the value of industry juggernaut World of Warcraft, and possibly also setting a new benchmark for profit margins among publicly traded video game pure-plays"

Along with the rosy outlook, Sebastian is raising the company's target price (the price at which buyers will purchase the stock) from $33 to $40.

Activision Blizzard formation set for July 8 [GamesIndustry.biz]

Activision Sets A Date, Picks A Name

Leigh Alexander — Mon, 09 Jun 2008 18:20:00 MDT

Activision's merger with Vivendi is up for final shareholder vote on July 8th, the company revealed today through an SEC filing. Not only are shareholders asked to approve the merger, but they're also considering several proposals up for vote.

Most of these are related to certain stock issuances, but two stick out from a different filing - stockholders may approve limiting Vivendi on some of the kinds of business it can engage in, firstly. And secondly, the shareholders will be considering the newly-formed company's name.

Up for approval? The official moniker "Activision Blizzard."

Activision Announces Record Billion-Dollar Growth In "Breakthrough" Fiscal 08

Leigh Alexander — Thu, 08 May 2008 15:30:00 MDT

Activision saw a record $2.90 billion in revenue for the fiscal year ending March 2008, the publisher announced today - $602.5 million was in the fourth quarter alone, as compared to $312.5 million during the same period last year.

Strong worldwide sales for Call of Duty 4, Guitar Hero III and Spider-Man 3 drove the considerable growth, supported by Transformers: The Game and Shrek The Third. NPD data also shows that GHIII was the year's best-selling game in the U.S. and Europe in dollars during the year, while CoD4 was the number two worldwide best-seller in Europe, and the number one highest-earning PC title worldwide. Both franchises have surpassed a billion dollars in sales since launch.

It was the most profitable fourth quarter ever for Activision, even though the publisher did not release any new titles during that period. With its overall growth outpacing the rest of the market by more than four times, the company is now the number one console and handheld software publisher in dollars, according to NPD Group data.

Activision also said that a thriving video game industry overall bolstered the $1.39 billion growth on the year and near-doubling on the quarter. On the company's call to investors, chairman and CEO Bobby Kotick said he expects the install base of next-gen consoles to continue growing by 60 percent over the coming year, and that current software price points should hold, though he said the company would "monitor prices closely and remain mindful of competitive practices."

Kotick also said the Guitar Hero franchise would "continue to expand, through more SKUs and more hardware innovations, including the first peripheral ever created for Nintendo DS."

Also upcoming on the company's release slate are Enemy Territory: Quake Wars for Xbox 360 and PlayStation 3; Kung Fu Panda on the Xbox 360, PS3, PS2, Wii, Windows PC and DS; Guitar Hero: On Tour for DS, and Guitar Hero: Aerosmith for Xbox 360, PS3 and PS2.

Additionally, a game based on the upcoming James Bond: Quantum of Solace film will release concurrently in Q3, developed on the same engine as CoD4. Kotick also said that "we're reinventing Tony from the ground up," hinting at big announcements to come regarding innovation on the Tony Hawk: Pro Skater franchise. "This won't be your father's Tony Hawk," he promised.

Activision also announced today that it will release downloadable content "for certain key titles" at the end of 2008, an area in which the company says it sees "continued growth and emerging opportunities."

Primarily, the company looks ahead to the finalization of its merger with Vivendi Games (notably including Blizzard Entertainment and its market-leading World of Warcraft), which still requires stockholder approval and other closing procedures.

Through the partnership, the company is planning moves into the MMO business in both North America and Asia. Activision's September 2007 acquisition of Bizarre Creations also positions the company, it said, to enter the racing game genre.

Kotick said that the company's studio structure positions the company advantageously, as it "allows studios to maintain creative culture which gives edge in attracting talent and fostering creativity." He also said that Activision remains the only publisher not to delay a key title during the year thanks to its proficiency in next-gen console development and the strength of its studio structure.

"Fiscal 2008 marks the 6th consecutive year we have grown our business," Kotick. "This achievement would not have been possible without the creativity, hard work and dedication of our employees and our commitment as a company to deliver long-term shareholder value."

"Over the last two decades Activision has had many successful years. However, this fiscal year was a breakthrough year for the company."

EU Gives Blizzard Activision Its Blessing

Mike Fahey — Wed, 16 Apr 2008 09:00:00 MDT

Today the European Commission granted French telecom and media group Vivendi permission to merge its videogame unit with Activision, thus bringing to fruition the merger first announced back in December. The Commission had to be sure that the joining of the two companies wouldn't cause a monopoly in the marketplace. They could have just asked us, but no, they had to be all official.

The Commission said for "all categories of game software, the combined firm would continue to face several strong, effective competitors, such as Electronic Arts, and the game console manufacturers, such as Sony, Nintendo and Microsoft".

Thank goodness. I know we were all on the edge of our seats there. Go tough-actin' BlizzActin!

EU approves Vivendi-Activision deal [Reuters - Thanks Thibaud!]

Activision May Be Considering A Massively Multiplayer Call Of Duty

Michael McWhertor — Tue, 04 Mar 2008 18:20:00 MST

The head cheese at Activision, Bobby Kotick, recently made headlines for his assertion that, in order to compete properly with World of Warcraft, publishers may need to invest nearly a billion dollars in such a venture. Fortunately for Kotick and crew, they now have access to the big brains at Blizzard and Vivendi, a group of folks who know quite a bit about the MMO business. How then, can Activision exploit its biggest earners into even bigger financial monsters?

The Activision CEO says that during the first few months of integration planning with Vivendi, they asked themselves some serious questions about what they consider "the fastest growing markets in the world", including Asian markets and MMOs.

As an example, Kotick said to investors at the Morgan Stanley Technology Conference, "What would be the natural evolution of a property like Call of Duty into a massively-multiplayer environment and how do you monetize that?"

Kotick parlayed that into a thought on in-game advertising, in which he pointed to Starcraft as a model for short-session, ladder tournament play that can easily support ad spots. While a Call of Duty MMO may be a long way off, if it ever gets off the ground, it's starting to sound like Activision execs may be giving it serious thought and we'd expect it to be a big focus for the publisher's ad revenue model.

WoW Killer Would Cost A Billion

Mike Fahey — Thu, 28 Feb 2008 09:20:11 MST

Think you've got an idea for an MMORPG that could completely kick World of Warcraft's ass? Well Activision CEO Bobby Kotick has some words of discouragement for you. According to the big boss, even attempting to take on WoW would set you back anywhere between $500 million and $1 billion dollars, and even once you've scraped together the cash there's still a chance you'd fail.

"We don't think that even if we made the USD 500 million or billion-dollar investment to get a product out [to compete with WOW] that we would even be successful doing it," he said.

Kotick points to the massive amount of cash that has already gone into the development of failed MMO product, doubting that even a company as well-managed as Activision would have a chance at making a profit in the sector. If you can't beat them, join them, eh Bobby? So is that it? Is World of Warcraft the de facto king of MMOs, never to be dethroned?

$1 billion investment needed to take on World of Warcraft - Kotick [GamesIndustry.biz]

Activision Sued Over Blizzard Merger

Luke Plunkett — Wed, 27 Feb 2008 01:30:00 MST

Time for more crazy lawsuit news! Why? Because everyone loves crazy lawsuit news. The mighty Wayne County Employees' Retirement System are unhappy with the merger deal Vivendi and Activision signed last year, claiming that as shareholders they copped a bum deal:

The merger, stock purchase and tender offer, working in concert, convey control of Activision to Vivendi but fail to offer the Activision stockholders an opportunity to realize a true control premium for their stock.

And to think, there once was a time people had to work for their money. Cry me a river.
Investors sue Activision over Vivendi merger [GI.biz]

The Activision Blizzard Merger That Nearly Wasn't

Maggie Greene — Sat, 02 Feb 2008 13:30:31 MST

Trying to combine two companies into one successful partnership that all sides are happy with is hard work - and the Activision Blizzard merger was no exception. Papers filed with the Securities & Exchange Commission (SEC) detail the process - the preliminary proxy statement is really, really massive, but does contain some interesting details about how the merger came to be (and almost wasn't on multiple occasions).

it was revealed that Activision and Vivendi management actually got together to discuss a possible merger as far back as November 2006. It wasn't until April and May of last year that talks really heated up, however ....
After going back and forth over certain transaction terms, in June Jean-Bernard Lévy, Chairman and Chief Executive Officer of Vivendi called up Activision head Bobby Kotick "to advise him that, due to the meaningful differences between the two companies' proposals and lack of any apparent progress, he did not think it made sense to continue discussions concerning a possible transaction at that time."

And this goes on and on until we wind up with the announcement that had me reaching for another cup of coffee in December. "The Transaction" section is interesting to page through, if only to get a closer look at how these seemingly out of the blue business transactions come into being.

The Activision Blizzard Deal That Almost Wasn't [GameDaily]

Surfer Girl Speaks Again: Blizzard MMO and EA's Karma

Mark Wilson — Fri, 14 Dec 2007 12:40:51 MST

Surfer Girl—the rogue rumor writer who still hasn't really been proven reliable or full of crap—has put up another interesting post. First, if you read between the lines a bit, she claims that Diablo is the new Blizzard MMO.

What is this new Blizzard MMO?
Demons, the Blizz don't do new IP.

OK, that's not exactly Earth-shattering speculation, but it's interesting possible confirmation of what many of us already suspect.

Next, she makes a pretty interesting counterpoint to those who call EA evil all the time.

What do you think of EA? Industry leader committed to quality, innovation and originality. No other company would have let Will Wright make Spore and definitely no one else would give Will tens of millions of dollars to develop a game about evolution with complete creative freedom. No one else would spend tens of millions on marketing on said title. Et cetera.

Well, at least we know she works for EA PR now. We kid. (But when we learn that she works for EA PR, make sure to remember that we mentioned it and totally weren't joking about it.) Ask Surfer Girl Volume VII [surfergirl]

What If EA Bought Take-Two?

Michael McWhertor — Wed, 05 Dec 2007 18:20:00 MST

GameDaily tests the raw mental computing power of four top industry analysts today, gathering their collective thoughts on the possible purchase of Take-Two Interactive by mega-publisher EA. It wasn't that long ago that EA boss John Riccitiello implied that big industry mergers were on their way out, following the company's own acquisition of Bioware/Pandemic. But with the Activision/Blizzard/Vivendi deal still piping hot fresh on industry watcher brains, one has to wonder: will EA snap up another?

Michael Pachter of Wedbush Morgan told GameDaily "EA has no interest in TTWO, too much to turnaround, and no guarantee of keeping the talent." He adds "EA has enough problems with their own turnaround, doesn't need the headache", pointing to a potential Rockstar Games split from its publisher in 14 months.

Mike Hickey of Janco Partners responds that if EA's going to be buying, they may very well snatch up Take-Two. "The most obvious potential acquisition in our view would be Take-Two Interactive", he says, as the acquisition of Take-Two could "eliminate their most powerful competitor in the sports market, improve their overall sports portfolio product quality, allow entry into sports categories currently protected by exclusive licensing agreements (MLB), and with essentially the same cost structure."

Having the Grand Theft Auto series under the umbrella wouldn't be so bad, either.

Majority consensus is that EA will still continue to expand, but may looking to less expensive purchases, a move into Asia and a couple of new Borg cubes with with to expand their empire. Sorry, still have Star Trek on the brain.

EA's Next Big Move: Take-Two? [GameDaily]

EA Ready For Blizzivision Brawl

Brian Ashcraft — Tue, 04 Dec 2007 05:00:54 MST

Electronic Arts has some stiff competition with the Activision Blizzard merger. EA is totally not afraid of Blizzivision. EA welcomes this competition. It doesn't matter if Activision already surpassed EA way back in July as the numero uno third party publisher and that this is just a nail in the proverbial coffin. Nor does it matter that Activision has the World of Warcraft as an IP, Electronic Art is so ready. EA is a fighter. Just listen to this EA rep, who writes:

We're always at our best when we have a clearly defined competitor... [The merger] doesn't change our strategy. Our CEO John Riccitiello has been encouraging senior managers to think of all other publishers as one large competitor — he's been encouraging them to think like challengers.

But wasn't EA already the challenger before the merger?
EA's Challenger [Next-Gen via CVG]

Blizzavision Conference Call

Mark Wilson — Mon, 03 Dec 2007 11:40:20 MST

This morning, Activision and Blizzard cracked the OJ for an AM conference call to investors (and of course, interested gaming media). It was a bit too early for our weekend hangovers to stand, but luckily MTV's Stephen Totilo wrote an extensive account of the meeting. Here are the highlights aside from rumors of Dark Elf McMuffin ingestion:

• WoW is not coming to consoles.
• But if a Blizzard title were to come to consoles, Blizzard would manage it.
• Actiblizzard will have 15% of worldwide gaming market and 6000 employees.
• Blizzard announced their revenue for the year: $1.1 billion. Reports suggest that upon the announcement, Activision quickly moved a nearby file over their crotch.

Activision Blizzard Update [MTVmultiplayer] [image]

Will There Be Activision Blizzard Branding? No.

Brian Ashcraft — Mon, 03 Dec 2007 01:00:07 MST

As we announced last night, Vivendi Games (which includes Blizzard Entertainment) and Activision have merged after Vivendi bought a majority share in the company. Like with any merger, things will obviously change. Things like the name, which will now be Activision Blizzard. Say that a couple times: Activision Blizzard, Activision Blizzard, Activision Blizzard. Seeing that on a game box just might frighten customers. Thankfully, we won't ever see that corporate moniker on a game box. Blizzard President and CEO Mike Morhaime explains:

In fact our games have never been branded as Vivendi. The Activision Blizzard brand will not appear anywhere as a consumer-facing brand. Basically it is a corporate brand for the overall company. If you want to buy stock in the company, the stock is called Activision Blizzard; the central shared services for the company, such as the sales and distribution force, will be Activision Blizzard. But Blizzard Entertainment will continue to be a publishing label... You should not see it [Activision Blizzard] on anything. It will not be associated with any product.

Thank goodness, because it sucks. Actard or Blizzivision would've been pretty sweet, though.
CEO Talks [1Up, Thanks Andrew!]

Vivendi Games and Activision Merge to Create Activision Blizzard [Update]

Maggie Greene — Sun, 02 Dec 2007 11:00:32 MST

So I woke up this morning to a press release (and a ton of emails to the tip line) announcing that Vivendi Games (which includes Blizzard) and Activision are merging. Raise your hand if you didn't see that one coming, or do I just need another cup of coffee? Does this mean we have Guitarcraft to look forward to? The companies are going to be holding a conference call tomorrow morning at 8:30 EST that will be accompanied by a live webcast on the Vivendi and Activision websites. Vivendi will be the majority share holder in the deal after purchasing $1.7 billion in Activision stock, and the whole deal is reported to be worth a cool $18.9 billion. The full press release, with all the nitty gritty of the arrangement, is after the jump. Update: if you don't feel like slogging through the entirety of the press release, Blizzard has a nice little FAQ up on how this will impact the day-to-day operations of Blizzard. Short answer? It won't. (thanks to Stephen Totilo for mentioning it).

SANTA MONICA, Calif. & PARIS, Dec 02, 2007 (BUSINESS WIRE) —
Activision, Inc. (NASDAQ: ATVI) and Vivendi (Euronext Paris: VIV)
today announced that they have signed a definitive agreement to
combine Vivendi Games, Vivendi's interactive entertainment business —
which includes Blizzard Entertainment's(R) World of Warcraft(R), the
world's #1 multi-player online role-playing game franchise — with
Activision, creating the world's largest pure-play online and console
game publisher. The new company, Activision Blizzard, is expected to
have approximately $3.8 billion in pro forma combined calendar 2007
revenues and the highest operating margins of any major third-party
video game publisher. On closing of the transaction, Activision will
be renamed Activision Blizzard and will continue to operate as a
public company traded on NASDAQ under the ticker ATVI.

Activision, one of the world's leading independent publishers of
interactive entertainment, is best known for its top-selling
franchises, including Guitar Hero(R), Call of Duty(R) and the Tony
Hawk series, as well as Spider-Man(TM), X-Men(TM), Shrek(R), James
Bond(TM) and TRANSFORMERS(TM). Blizzard Entertainment, a division of
Vivendi Games, has projected calendar 2007 revenues of $1.1 billion,
operating margins of over 40% and approximately $520 million of
operating profit. Blizzard owns the #1 multi-player online
role-playing game franchise, World of Warcraft, which currently has
over 9.3 million subscribers worldwide. Blizzard's World of Warcraft,
Warcraft(R), StarCraft(R) and Diablo(R) games account for four of the
top-five best-selling PC game titles of all time. Vivendi Games also
owns popular franchises, including Crash Bandicoot(TM) and Spyro(TM).
Pro forma for calendar 2007, Activision Blizzard expects to generate
approximately 70% of its revenues from owned franchises. As a result
of the business combination, Activision Blizzard expects to have the
most diversified and broadest portfolio of interactive entertainment
assets in its industry, positioning the combined company to capitalize
on the continued worldwide growth in interactive entertainment.

Jean-Bernard Levy, Chairman of the Management Board and Chief
Executive Officer of Vivendi stated: "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 creating a worldwide
leader in a high-growth industry. We are excited about the
opportunities for Activision Blizzard as a broader entertainment
software platform. We believe this transaction will create significant
value for Activision Blizzard and Vivendi stockholders. In Activision,
we have found a partner with a highly complementary business and
strong operating team. Bobby Kotick and Brian Kelly are industry
pioneers, well known for creating shareholder value. The combined
strength of the existing management teams at both companies will set
the stage for further profitable growth of Activision Blizzard. We
look forward to being an active and supportive majority stockholder in
a company that is poised to lead the worldwide interactive
entertainment industry in the years ahead."

Rene Penisson, Member of the Management Board of Vivendi and current
Chairman of Vivendi Games, added: "We are very confident that by
combining forces, Activision Blizzard will set the highest standards
in quality, reputation and profitability, and will bring together the
best creative teams in the industry. The combination of this unique
product portfolio with highly professional employees gives us great
confidence in the growth prospects for Activision Blizzard."

Said Robert Kotick, Activision's Chairman and Chief Executive Officer:
"This is an outstanding transaction for Activision and our
stockholders, as well as a pivotal event in the continuing
transformation of the interactive entertainment industry. By combining
leaders in mass-market entertainment and subscription-based online
games, Activision Blizzard will be the only publisher with leading
market positions across all categories of the rapidly growing
interactive entertainment software industry and reach the broadest
possible audiences. By joining forces with Vivendi Games, we will
become the immediate leader in the highly profitable online games
business and gain a large footprint in the rapidly growing Asian
markets, including China and Korea, while maintaining our leading
operating performance across North America and Europe. Activision
stockholders will benefit from significantly increased earnings power
and the recurring nature and predictability of subscription-based
revenues, while also having the opportunity, if they choose, to
receive $27.50 per share for a portion of their shares in the
post-closing tender offer."

Kotick continued: "Vivendi Games provides Activision with unique
strategic and financial benefits and will allow us to leverage our
franchises into emerging online opportunities as Blizzard has done so
successfully. Activision has been very focused on margin expansion,
and this transaction will meaningfully increase our overall operating
margins as we expand our franchises online and in new geographies.
Diversifying our revenue base among subscription-based online, console
and PC formats, as well as wireless and casual emerging opportunities,
gives us the broadest platform to capitalize on industry growth. With
Blizzard's successful franchises, such as World of Warcraft, StarCraft
and an exciting pipeline of yet-to-be announced titles, Vivendi Games'
and Blizzard's management team will join with Activision's strong and
experienced leaders to become an even more powerful force for
innovation in online and offline interactive entertainment across a
wide range of platforms. This transaction also provides a unique
relationship with Universal Music Group - the world's largest music
company - which will benefit Guitar Hero and further extend our
sizable leadership position in music-based games."

Mike Morhaime, President and Chief Executive Officer of Blizzard,
added: "Blizzard's industry-leading PC games business, with a track
record of nine consecutive bestsellers and a global subscriber base of
more than 9.3 million World of Warcraft players, is an exceptional fit
for Activision's highly profitable console games business. From our
interactions with the Activision team, it is clear we have much in
common in terms of our approaches to game development and publishing.
Above all, we are looking forward to continue creating great games for
Blizzard gamers around the world, and we believe this new partnership
will help us to do that even better than before."

Structure & Terms of Transaction

Under the terms of the agreement, Vivendi Games will be merged with a
wholly owned subsidiary of Activision. In the merger, shares of
Vivendi Games will be converted into 295.3 million new shares of
Activision common stock. Based on the transaction price of $27.50 per
share of Activision common stock, this implies a value of
approximately $8.1 billion for Vivendi Games. Concurrently with the
merger, Vivendi will purchase 62.9 million newly issued shares of
Activision common stock at a price of $27.50 per share - a premium of
31% to Activision's average closing price over the past 20 trading
days - for a total of $1.7 billion in cash. As a result of these
transactions, Vivendi will own an approximate 52% ownership stake in
Activision Blizzard on a fully diluted basis.

Within five business days after closing the transaction, Activision
Blizzard will launch a $4 billion all-cash tender offer to purchase up
to 146.5 million Activision Blizzard common shares at $27.50 per
share. The tender offer will be funded by Activision Blizzard's cash
on hand at closing, including the $1.7 billion in cash received from
the Vivendi share purchase. In addition, Vivendi has agreed to acquire
from Activision Blizzard additional newly issued shares for up to an
additional $700 million of Activision common stock at $27.50 per
share, the proceeds of which would also be used to fund the tender
offer. Any remaining funds required to complete the tender offer will
be borrowed by Activision Blizzard from Vivendi or third-party
lenders. If the tender offer is fully subscribed, Vivendi will own an
approximate 68% ownership stake in Activision Blizzard on a fully
diluted basis.

The transaction is expected to be immediately accretive in its first
year post-closing for Activision's stockholders and slightly accretive
for Vivendi's stockholders. Activision Blizzard is targeting pro forma
operating income of $1.1 billion and pro forma earnings per share
(EPS) in excess of $1.20 in calendar year 2009. The transaction is
expected to be at least $0.20 accretive to Activision stockholders in
calendar year 2009.

Governance

Activision Blizzard's board of directors will be comprised of eleven
members: six directors designated by Vivendi, two Activision
management directors and three independent directors who currently
serve on Activision's board of directors. Rene Penisson, currently a
member of the Management Board of Vivendi and Chairman of Vivendi
Games, will serve as Chairman of Activision Blizzard. Brian Kelly,
currently Co-Chairman of Activision, will serve as Co-Chairman of
Activision Blizzard. The three independent directors will be Richard
Sarnoff, Robert J. Corti and Robert Morgado. Other Activision Blizzard
directors will be Robert Kotick (President and Chief Executive Officer
of Activision Blizzard), Bruce Hack (Vice-Chairman and Chief Corporate
Officer of Activision Blizzard), Jean-Bernard Levy (Chairman of the
Management Board and Chief Executive Officer of Vivendi), Doug Morris
(Chairman and Chief Executive Officer of the Universal Music Group),
Philippe Capron (Member of the Management Board and Chief Financial
Officer of Vivendi), and Frederic Crepin (Senior Vice President, Head
of Legal, Vivendi).

Management

Following the completion of the transaction, Robert Kotick will be
President and Chief Executive Officer of Activision Blizzard. Bruce
Hack, current Chief Executive Officer of Vivendi Games, will serve as
Vice-Chairman and Chief Corporate Officer of Activision Blizzard,
accountable for leading the merger integration and the finance, human
resources and legal functions. Mike Griffith will serve as President
and Chief Executive Officer of Activision Publishing, which after
closing will include the Sierra Entertainment, Sierra Online and
Vivendi Games Mobile divisions in addition to the Activision business.
Mike Morhaime will continue to serve as President and Chief Executive
Officer of Blizzard Entertainment. Thomas Tippl, currently Chief
Financial Officer of Activision, will be appointed Chief Financial
Officer of Activision Blizzard and Jean-Francois Grollemund, currently
Chief Financial Officer of Vivendi Games, will be appointed Chief
Accounting Officer of Activision Blizzard.