Activision Blizzard: Blizzard Yet to Meet Full Potential, No Plans For Blizz. Franchises on Consoles

Speaking on the merger between Activision and Vivendi Games, Vivendi CEO Jean-Bernard Levy has labeled subsidiary Blizzard Entertainment as the "crown jewel of the industry."

The company formed by the merger, Activision Blizzard, is the "largest and most profitable multi-platform publisher in the world" and its creation "fulfills the promise of digital media convergence," said Levy. Vivendi will hold a 52% majority stake in Activision Blizzard, and stated its intent to increase that figure to 68% in the days following merger's completion.

Repeatedly emphasized in a conference call was the importance of World of Warcraft developer Blizzard in the new company. According to Levy, the studio "has yet to fulfill its full potential."

Warcraft, StarCraft, and Diablo creator Blizzard is responsible for the "most powerful brands in all of entertainment," noted Activision CEO Bobby Kotick. "It is a business we and many of our competitors found extremely difficult to duplicate without risking hundreds of millions of dollars. Even then, we were unlikely to achieve success."

"I think this is an opportunity to unlock the value that is hidden inside Blizzard," said Blizzard CEO and president Mike Morhaime. He also noted his belief that Vivendi shareholders never gave the studio "proper credit" for its efforts.

"We currently don't have any plans right now on the console-side. Blizzard's focus is on the PC-side," noted Morhaime. "If we were to release anything on the console-side, that would be managed by the Blizzard side of the business.

"At some point in the future, if it made sense to talk to the Activision side of the business about that, we would certainly do so," he continued. "But at this point, there are no plans to release any Blizzard franchises on console.

"I spent a lot of time talking with Bobby [Kotick] and his team about Blizzard's core philosophies, which really revolve around developing high-quality software," Morhaime explained. "We found that Activision shares these values, [which is] very important for Blizzard."

Kotick stressed that Activision Blizzard is confident in its growth in the "fragmented" video game market and is the only publisher in a "position to capitalize on all online and offline opportunities." Following the merger, the company will "reduce investment in unproven business opportunities.

"Once we complete the transaction, we'll conduct a review of all under-performing assets to determine what measures will be required to ensure our investments yield returns consistent with our financial objectives," stated Kotick. "Our strategy going forward will be to continue doing what we do well and to focus on extracting greater value from the combined entity."

As for the future of World of Warcraft, Blizzard plans to continue developing new content and expanding its subscriber base. "From a high level, we intend to grow our subscriber base in the market we're currently in and continue to look at other markets," noted Blizzard CEO and president Mike Morhaime, who noted that markets targeted for expansion include areas with growing broadband penetration, such as Russia, Eastern Europe, and India.

"Since Brian [Kelly] and I acquired control of Activision in 1990, we intended to build the largest, most profitable leader in the video game industry," claimed Kotick. "With this transaction, we will achieve that objective."