
Activision Blizzard goes indie after CEO Kotick buys back the company - bdz
http://massively.joystiq.com/2013/07/26/activision-blizzard-goes-indie-after-ceo-kotick-buys-back-the-co/
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jonnathanson
Not mentioned in this story: Chinese internet giant Tencent is part of the
"investment group" Kotick has put together. Basically, the company is
switching ownership from one conglomerate to a diffusion of others. I'd hardly
call that "independent" in any sense of the word.

This story is less about independence, and more about allowing Vivendi to cash
out on its 2007 merger of Activision and Blizzard. Basically, Vivendi
transferred Blizzard to Activision in exchange for 52% of the combined entity
(Activision Blizzard). While A-B has been doing well over the years, Vivendi
has not fared as well. It wants some to capture some of the upside through the
buyback.

~~~
wikwocket
The article says that Activision Blizzard is buying the majority (about two
thirds) of the shares itself. And presumably Kotick and Kelly have some
personal stake in the investment group getting the rest of the shares?

I don't know if this makes them "independent," but it doesn't seem to make
them owned by a conglomeration of other parties either.

~~~
jonnathanson
To clarify my previous comment...

The post-split cap table looks something like this (from what information has
been made public at this point): Bobby Kotick & associates (including Brian
Kelly and Tencent, among other unnamed parties) own 24.9%. Vivendi's share
drops to 12%. A-B itself buys back the majority of shares. Technically
speaking, yes, A-B becomes an independent company (in as much as the majority
of outstanding shares are publicly owned).

My phrase "I'd hardly call that independent" was probably an overstatement
worth correcting. My bad on that one. Because the word "independent" (and
especially the derivative "indie") has a very industry-specific meaning in
this case, I found the headline a bit misleading.

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babuskov
After carefully investigating definition of "indie", it seems that Microsoft
is an "indie" company as much as Blizzard.

~~~
kzrdude
Like other indie developers, Blizzard is cutting the middleman and selling the
game directly to their fans. In this case Blizzard accomplished this by
merging with games publisher Activision.

~~~
astrodust
Why did Blizzard merge in the first place? They were making literal truckloads
of cash. Did Activision have a warehouse to put all the money?

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zrail
> the split will see 439 shares (worth $5.83 billion) bought by Activision
> Blizzard itself, while an investment group led by Kotick and Kelly will
> purchase 172 million shares (worth $2.32 billion)

Those 439 shares must have one hell of a preference.

~~~
antr
It's a typo. The real number is 429 million shares.

~~~
pavanky
429 million sounds about right. 439 million skews the numbers way too much.

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shawabawa3
I thought for a second this was Vivendi buying Blizzard out of Activision, not
the other way round. Blizzard games have definitely gone downhill since the
activision merge

~~~
norswap
Have they? If anything, I think they have improved. It might not please
everyone (I miss the old WoW), but it seems to me that Blizzard is making
informed game design decisions based on what the users want. I wouldn't
surprised me to hear they invested a lot in big data analytics.

Their big screw-up is perhaps the Diablo III auction house. The idea is good,
but it has spiraled out of control. The auction house is now the only viable
way to acquire gear. Playing only serves to rack money, but reselling is as
good a way to make money. Gear serves to play, to rack more money, to buy
better gear. The auction house is now the game. You can do very well at the
game without ever playing the "real" game. Not to mention that shelling a few
euros on the real money auction house will save tens of hours of farming, and
real money continues to appreciate wrt in-game currency.

~~~
criley2
They've grown to include wider appeal and be more profitable.

Since the merger, Blizzard has aggressively moved towards in-game real money
transactions including one high profile fuckup where they irreparably ruined
the economy of an entire game, ruining the game itself for many players
(especially their older and more devoted fans).

They've scrapped their major next MMO, pushing it back and folding much of the
staff into other projects while this one goes back to the drawing board.

They predictably released StarCraft 1.5, the graphics update, but StarCraft is
a known commodity and they didn't have the leeway to make substantial changes
without massively disrupting the playerbase.

I can't find a single product of theirs that screams character and love and
devotion to video games like their classics do, but every single product does
appear to be a financially calculated move to extract as much money as
possible from gamers.

From this long time (and no longer) Blizzard fan, modern Blizzard looks more
like Zynga than the company they once were. More interested in ARPU than
making wonderful games.

~~~
foobarian
Speaking of love of and devotion to games, if you want to see what the
original Diablo team has done lately take a look at Torchlight II - it still
has that something that D3 is missing and D1/2 had.

~~~
Negitivefrags
Blatant self promotion, but have you tried Path of Exile?

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mtgx
I'm not sure if I would call a company the size of Activision Blizzard
"indie".

~~~
CodeCube
There is of course a spectrum of "indieness". You seem to be subscribing to
the small indie theory, where the team is comprised of just a handful of
people; the perpetual underdog.

On the other side are those who define indie as your level of freedom to do
what you please with your product. In that case, even though they may be large
and successful, being privately owned and without a 3rd party (ie. publisher)
gives them the freedom to take their games in whatever direction they choose.

~~~
stelonix
Vivendi was never a publisher for Activision, Blizzard or Activision Blizzard.
It was merely their owner. Both companies as well as the merged version of
them were always self-publishers. They were always independent of other
publishers (sans Blizzard back in the early 90s, but that's besides the
point).

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Tomis02
Indie my ass. OP means independent.

~~~
norswap
I'm confused, isn't "indie" an abbreviation for "independant"?

~~~
Tomis02
In the gaming world "indie" refers to small teams who are usually bootstrapped
and not owned by some publisher. They try focusing on real game innovation and
don't usually have big budgets - at least not when they start out, so they
will use the cheapest tools available (e.g. Blender instead of 3d max); for
instance I don't know if the studio developing Minecraft still qualifies as
indie because they seem to have a truckload of money, so the definition may be
fuzzy.

In any case, ActiBlizzard is very very far from being indie. They don't
innovate, they have loads of money from some of their cash cows and probably
every member of their team is easily replaceable like a standard cog in a
machine. And when you're listed on NASDAQ and your employee count is in the
thousands then you're practically a corporation.

~~~
macspoofing
>They try focusing on real game innovation...

I think you took the definition a tad too far.

~~~
doyoulikeworms
I think he did too, but it is true that innovation is very important to the
indie community.

Most indies don't have teams of engineers, artists, designers, marketers, or
musicians to polish their turds into blockbuster gems. Because of this, an
indie had better hope that their project begins as shiny as possible, which is
why innovation (especially in gameplay) is crucial.

~~~
macspoofing
I'd say (by far) most indie games are turds (just look at the amount of crap
games on mobile app stores). Games like Fez, Braid and Super Meat Boy are few
and far between.

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_nullandnull_
It's interesting that Dell is doing this and now Activision. I wonder if we
will start to see a trend of other companies doing the same?

~~~
Charos
It's a distinct possibility. The C-suite is finally starting to understand the
flaws in shareholder value theory, and going private/independent allows them
to focus on long term value without having shareholders clamoring for their
resignation due to poor short-term balance sheet results. Giant conglomerates
such as GE or P&G will stay public, but I wouldn't be surprised if more
focused technology firms - or even companies in other areas of consumer goods
- start following this trend. It could be good for industry to have some
variety in this way.

~~~
PakG1
Maybe. See letter to shareholders by Jeff Bezos. If the business can handle
it, and the leadership is capable, I don't see why they would avoid the
benefits of being public either. When public, among other things, you have
access to a huge amount of capital if you want it (if you can handle the
effects of the increased dilution).

[http://www.businessinsider.com/amazons-letter-to-
shareholder...](http://www.businessinsider.com/amazons-letter-to-
shareholders-2013-4)

~~~
kenster07
No one should expect Bezos to speak for all companies in -Amazon's- letter to
the shareholder.

The problem with the stock market is that it is optimizing for a different
thing than most companies, and even society at large. If the minimum holding
period for an asset was, say, 20 years, the subprime mortgage crash would have
been much less likely. (One could make a similar argument for democratic
office. But I digress.)

Shareholder value theory induces a sort of hysterical myopia, where ideas and
results are evaluated in these Q2Q or Y2Y window. Growth is only evaluated
within the context of the company, which creates perverse incentives wrt
externalizing costs. Furthermore, if growth initiatives require no additional
external funding, then the public stock market -really- makes no sense, and
that is likely the case for Blizzard and Dell.

Getting away from shareholder value theory's myopia is the surest way to begin
a sustainable recovery of our capital markets.

~~~
CamperBob2
_If the minimum holding period for an asset was, say, 20 years, the subprime
mortgage crash would have been much less likely._

One wonders what rules Microsoft stockholders are playing by. They seem to
have the patience of a Zen master. Are their dividends enough to justify
another 'lost decade' with Ballmer in charge?

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dmead
can we have lan in starcraft 2?

~~~
AjithAntony
Depending on why you want LAN, you may be interested in "Spawn mode" which
lets you get all your friends together and play custom games and things. Your
friends install the "Starter Edition" as long as one of you owns the game you
can all play.

Still requires internet and battle.net accounts.

[http://us.battle.net/sc2/en/buy-
now/spawning](http://us.battle.net/sc2/en/buy-now/spawning)

~~~
dmead
i want lan so that i can use the product i paid for without having to check in
with bliz every time i do it.

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ChuckMcM
Interesting (and smart) move on Kotick's part. I think WoW suffered under the
mantra of 'make it broader, make it broader ...' perhaps they will pull back a
bit from that.

