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Vivendi, Activision Merger to Cause Upheaval in Gaming Biz

Activision shareholders are expected today to approve a merger with Vivendi Games in a deal that will shake up the gaming biz.

The deal, unveiled in December, valued the new Activision Blizzard at $18.9 billion - compared with Electronic Arts’ market capitalization, after Monday’s market close, of $14.1 billion, according to Yahoo Finance (via The Hollywood Reporter).

More telling is the fact that, while EA has been reporting losses, Activision Blizzard shows promise to be the most profitable gaming firm and to grow at a healthy pace.

“I don’t care about who is No. 1 and 2,” Hudson Square Research analyst Daniel Ernst said. “Earnings growth is what counts for investors.”

Activision Blizzard is brings together some of the hottest gaming franchises, such as Vivendi’s World of Warcraft and Activision’s Guitar Hero.

“What it does is create a truly global gaming company with reach in the U.S., Europe and Asia,” including in the fast-emerging Chinese market, Edward Williams, an analyst with BMO Capital Markets, is quoted as saying in Adweek. “It also creates a company that drives revenue from multiple streams, including the massively [multiplayer] online game category that is seeing the biggest growth.”