Vivendi SA, a French media conglomerate, may ask for $3 Billion from Activision Blizzard. In today’s Vivendi board meeting a move to extract the money will be discussed. The Wall Street Journal reported that about $2 Billion of that sum would be used to help with high debt that Vivendi has accrued.
After today’s meeting, it is assumed that the Vivendi board members will press for approval at a regular Activision Blizzard meeting on Thursday. Reuters reports that six of the eleven A/B board members are from Vivendi. Sources at WSJ say that because most of A/B’s money is located in offshore accounts, the company will go into debt if asked to hand over the large sum.
Activision Blizzard is a very successful company, and has just over $4 Billion in its accounts, much of it kept in off-shore accounts. The gaming company has done well for itself by focusing on big titles and not spreading itself out to mobile and free-to-play games. They would need to go into debt in order to meet the special dividend that will be put forth by Vivendi because of US taxes that will come into play when the money changes hands. Current estimates to the amount of debt that A/B will be forced to take on sits at about $1.5 Billion.
Vivendi has accrued over $17 Billion in debt, which was the result of poor business strategies involving telecoms. The original agreement with Activision Blizzard stated that the parent company could not require special dividends from A/B, but that deal expired earlier this month. Vivendi is wasting no time taking everything it can from the game company.
Although Activision CEO Bobby Kotick seems interested in buying the company back from Vivendi, that hasn’t happened. Vivendi has already tried selling off the company, but it didn’t seem there was an interested party who had the cash to buy the world’s largest game publisher. There doesn’t seem to be any reason why the special dividend put forth by the parent company won’t go through.
What Does It All Mean?
Even with the incoming dramatic drain of cash, Activision Blizzard is still sitting in a very good position. The company boasts some of the industry’s biggest and most successful titles and the future looks great as the new PlayStation 4 and Xbox One looms on the horizon.
Until now Vivendi has maintained a hands-off approach when it comes to A/B, but the cash drain could be the first of sign of a major change in that policy. Once Activision Blizzard is thrown into substantial debt by Vivendi, it is unclear what we as consumers can expect. Could smaller, cheaper titles be on the way to help balance the budget? Perhaps Blizzard will offer more hats? It’s possible that layoffs could ensue that might affect customer service or even the level of development that we have come to expect in their games.
Whatever your thoughts on Activision Blizzard, this much is true: The wildly successful company who has made very good business decisions is about to go into debt because its parent company made poor business decisions…unless you count the one where they bought Activision Blizzard in the first place.
The number of World of Warcraft monthly subscribers has dropped to 7.7 million, Activision Blizzard has revealed.
That's comparable to the audience the MMO had in 2007, shortly before first expansion The Burning Crusade helped it break the 8 million mark.
Today's numbers are for the financial quarter ended 30th June (full report due 1st August), and are based on what should be pretty accurate internal estimates from Activision Blizzard.
It marks a notable decline for World of Warcraft in recent times, having fallen fairly steadily from a highpoint of 12 million subscribers in October 2010 - two months before Cataclysm.
Starting in patch 5.4, Blizzard will introduce connected realms: servers that are functionally joined together with other servers to share population and resources.
While the affected realms will remain technically independent, the lines between the two connected realms will be blurred. These realms will be able to share population, have one linked auction house, and allow players of both servers to group, guild, and PvP together.
So why not just merge? Blizzard's official answer reasons, "Other alternatives such as merging realms would require us to force character name changes if there were conflicts, and could lead to confusion for returning players who'd log in to find their realm missing from the realm list. Some players also feel strong ties to their realm's name or history, and we don't want to erase that."
The list of what servers will be connected has yet to be released.
They append your servername. I assume this was necessary for any cross realm activity like Raid Finder or Battlegrounds. Now sure which but I am either Kulaf.Proudmoore or Kulaf@Proudmoore.
Q1 2014 Earnings Call
In Blizzard's first quarter 2014 earnings call, it was announced that World of Warcraft is now down to 7.6 million subscribers, indicating a fall of only 200,000 subscribers in the quarter extending from January to March 2014.
5.4 was the last raid content patch and it was in Sept 2013. I am amazed it only dropped 200k honestly. It will keep dropping until they launch Warlords of Draenor and then it will probably spike back over 9 million unless some other MMO is a smash hit by then.
