EA Not Worried About Activision Blizzard

While a bit of peripheral news, it’s interesting to see how EA (owner of BioWare) reacts to the Activision and Vivendi merger as the race for mass consolidation continues.

(.We’re always at our best when we have a clearly defined competitor,) said an EA rep. ([The Activision/Vivendi 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.)

The rivalry between Redwood City, Calif.-based EA and Santa Monica-headquarted Activision heated up Sunday when Vivendi announced plans to buy a controlling stake in Activision, makers of Guitar Hero and Call of Duty. The deal is valued at $18.9 billion.

The deal, the biggest in the history of the games industry, virtually eliminates the gap between a clear number one (EA) and a number two (Activision) third-party publisher. The Activision/Vivendi Games entity, now labeled Activision Blizzard (named after Vivendi’s star World of Warcraft studio), expects to generate $3.8 billion in revenues for calendar 2007, while EA is expecting to generate $3.35 billion to $3.65 billion for the fiscal year ending March 31, 2008.
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The rep added, (.We wish them good luck and look forward to the competition. We believe that EA still has the industry’s strongest portfolio of game franchises.)

One should really expect these two to keep rolling as they swallow the entire NA gaming industry. Take-Two Interactive CEO Ben Feder recently commented at a business conference.

“I do believe that consolidation ultimately is inevitable,” Feder told Reuters.

“Video-game development is not getting any cheaper. It’s a capital-intensive business, and I don’t see that going away. That will drive some of the smaller competitors out.”
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Take-Two’s current market value stands at USD 1.08 billion.

“[The Activision/Vivendi merger] probably isn’t the news you want to hear if you are a publisher having a market capitalisation under USD 5 billion,” simExchange analyst Jesse Divnich told GamesIndustry.biz.

“There is no doubt in my mind that these recent buyouts and mergers are just the first of many to come.

“What concerns me is that a company like Take-Two may be last on that list as they can be a media/PR headache with some of their titles making them unattractive to media conglomerates,” he said.

If you ask me, Activision does look stronger than EA, now.