5 reasons gamers should be concerned about the sale of Activision-Blizzard

by manylaughs on July 18, 2012

All right reserved, Vivendi

 

So maybe you’ve heard Activision-Blizzard is for sale? What do you care, you have games to play, right?

Here are 5 reasons you should care:

1. New management means new “ideas”.

Activision-Blizzard’s current owner, Vivendi, appears to have been mostly a benevolent dictator, allowing Activision-Blizzard to keep doing its thing – cranking out tons of cash for the parent company. Unfortunately, when a company changes hands the new owner usually tries to put their own mark the company they bought. Whoever buys Activision-Blizzard is going to have their own ideas about how to run the company, essentially fixing what isn’t broke.

Everyone knows what happens when you try to fix something that isn’t broke, right? Yep, that’s right – you break it.

2. A lot of Activision-Blizzard employees will probably leave.

It’s a simple fact of life, people hate change, and when it’s forced on you, you really hate it. Employees at Activision-Blizzard are probably a tad nervous, right now, about this impending change. They’re asking questions: Will I still have a job? Will my benefits be cut? Will my friends in the office still be working here? Will I still get free soda?

Everyone was nice and cozy in their little work culture and now they have all these worries to contend with. If those worries get to be too much, people start updating their resumes. The longer Activision-Blizzard is without a buyer, the more likely it is key employees will leave. They want to get back to a stable work environment, one where they don’t have to worry about who the new owner is going to be.

And once the sale goes through, even more employees will leave, simply because they’re not going to like the changes the new management will start to implement.

A sale of any company usually means the loss of a lot of key employees. That’s not going to be good for Activision-Blizzard’s core products.

3. A lot of people will probably lose their jobs.

When there’s a change in management it usually means management brings in their own people. It doesn’t matter if they don’t know an MMO from checkers, they’re going to think they know better and chances are a lot of Activision-Blizzard’s management will lose their jobs. That means a loss of continuity and probably won’t be good for the company or the games they produce.

4. Activision-Blizzard might be broken up.

One of the possible suitors for the Activision-Blizzard prize is rumored to be Microsoft. Unfortunately, since Microsoft makes the Xbox and most of the games it produces are only available for the Xbox and PCs, Microsoft probably wouldn’t want Activision. Activision games are not console-specific; Microsoft games usually are. Microsoft wants to encourage people to buy their Xbox, so Microsoft probably doesn’t want Activision.

Blizzard, on the other hand, is great for Microsoft’s gaming business. None of their products are console specific and Blizzard’s core products – World of Warcraft, Diablo and StarCraft – are gaming gold. Activision’s core product is Call of Duty and that’s pretty much it. Call of Duty is huge, but if it stands in the way of acquiring Blizzard, why keep the company together?

If Activision is cut loose, that’s bad news for Call of Duty fans. Activision is much stronger partnered with Blizzard. Activision is far less valuable and viable on its own, which would certainly impact the quality of future games from Activision.

5. An investment company might buy them.

There are also rumored to be several investment companies that are interested in Activision-Blizzard. In spite of all the Bain Capital stories, investment companies (a.k.a. private equity firms) can sometimes help a company grow and become more profitable. However, the other side of Bain Capital and all investment companies is that they can also saddle companies with unnecessary debt to pay for the investment company’s “consulting” fees, break up parts of a company they deem are under-performing and also drive a company into bankruptcy in order to jettison costly pension plans.

The investment company is in it to make money and they really don’t care if the company they bought makes games, steel or chewing gum. They don’t even care if the company survives: If they can make money by destroying it, that’s fine, too.

That’s probably not who gamers want in charge of Activision-Blizzard.

Whatever happens with the sale of Activision-Blizzard, none of it looks good for gamers. The very fact Activision-Blizzard is on the market hurts the company – the longer it’s up for sale, the more employees are likely to jump ship. The best thing for the company is if they don’t find a seller and Vivendi decides to dump its shares on the open market. That will drive down the share price, but at least the people at Activision-Blizzard will be their own bosses.

 

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