Activision Looks Into the Future

The NYTimes looks at Activision's new competitive position following the megamerger with Vivendi Games to formed Activision Blizzard.

On the face of it, the deal looks like a logical one:
- combines an online game specialist (Vivendi) with a standard video game producer (Activision)
- provides top-line visibility given recurring revenue to Activision's business model given Vivendi's online's monthly fee structure for several of its games
- World of Warcraft (Vivendi) remains one of the most attractive franchises in the business, and when combined with Activision's powerhouses (Guitar Hero series and Call of Duty, to name a few), the Company will have one of the most coveted repertoire of video games in the industry.
- Opportunity for operating leverage and margin improvement given the inherent scalability of the business

The Sell-Side is welcoming the deal with open arms, by the way. Anyone that wants to see research reports on this deal, shoot me an email.