I think it's the fact that they're only getting millions of dollars out of Activision-Blizzard instead of billions. They were hoping to sell them off for a neat billion or two profit, which doesn't work if nobody's buying. So they drain all the cash that they can from it, and nobody wins.Kahani said:
Vivendi May Siphon Funds From Activision Blizzard
- Thread starter Steven Bogos
- Start date
and here, boys and girls, is a great example of how well "capitalizm works".
to be honest, i wish Blizzard woudl be able to split as it went downhill once it merged with activision anyway, and activision, you can burn for all i care.
to be honest, i wish Blizzard woudl be able to split as it went downhill once it merged with activision anyway, and activision, you can burn for all i care.
That's what makes the most sense, but I've never seen it happen. Executives always keep their friends on board till the end, even if it kills them. My dad controlled 1 out of 15 offices of a particular construction company before the recession, of which his office was THE ONLY ONE that was making a profit for the company. So logically the CEO fires him (the guy he doesn't 'personally know'), and a month later the entire company goes under and the CEO personally files for bankruptcy, as he had to personally fund the hole my dad left. As a middle finger, my dad decided he didn't want to work for others anymore and immediately made his own business, and it's still going strong 7 years laterviggih7 said:
Activision-Blizzard is just as faceless as every other asset Vivendi owns. Keep in mind that as OP points out these guys have their fingers in the pockets of Big Oil, so on a good day Act-Bliz makes pennies in comparison to the international economy fueling assets. The investment might be seeing a return 3x greater but that isn't cutting it as other assets see returns to the factor of 100x. It's not worth it, and as others have pointed out the WoW/CoD bubbles are expected to pop soon. To them Activision-Blizzard is Old Yeller. They are grabbing a keepsake, then they are going to bring it out back and put a cap in it.
Because they, and a lot of other crazy market gamblers, believe Activision/Blizzard is a walking corpse. The moment CoD and/or WoW fail the revenue stream on the company will tighten and effectively kill the company. Too much revenue from too few games no matter how good it look on paper will end badly when the gravy train stops.Aeshi said:
Vivendi wants to get ride of it while it still looked profitable. If they can't sell it they'll just raid it for all it's worth and leave it to die on the side of the road. It's how corporate raiders work and make their money.
A lot of businesses have died this way, and if Vivendi is successful Blizzard will be effectively dead. The only way they have to survive is to create an IP that is as profitable as CoD and WoW. Without the money Vivendi is going to take they won't be able too.
For some reason I'm not sad about this. The DRM in SC2 and D3 burned me pretty badly. And not to meantion that they stated that D3 supported a card for my Wifes Mac so she bought the game for her, but it certainly didn't work with that particular card ever even though they stated it would, and had tested that card on a mac. No reasonable return policy, no way to resell the game due to DRM, and a waist of my time and effort moving heaven and earth to get it to work.
In a way, to me this is the only justice I'll ever see.
I'm no economist, but isn't it wise to sell something at its peak? Even if WoW and CoD don't die anytime soon, I doubt they'll drastically increase in value, especially under Activision's management (which could be argued to be the reason for WoW's current decline, or else just a declining interest in MMOs in general). If they can get someone to actually pay the exorbitant fee the company is worth, it will probably make them more money than the games themselves will, and allow them to latch onto (and probably sink) the next big trend. Seems financially sound to me, albeit trademarkedly unethical.Aeshi said:
So this is what happens when the big fish runs out of smaller fish to eat. I was starting to wonder when we'd see this happen. If Vivendi is serious about selling then they have to break their shares up or severely reduce their asking price. You don't just go to market and sell the controlling share in something that big because no one can afford to buy it. Not to mention the market is basically a self-fulfilling prophesy machine, so all the doom saying usually directly contributes to actual doom.
Doooooom!
Doooooom!
And this is why the market is essentially gambling: You have to figure out when the peak is and sell before everyone else figures out where the peak is, because once they do, or even if they just THINK they do, they won't buy. Fun fun for everyone, except the companies being bought and sold, since they're the ones left holding the bag.RatherDashing89 said:
I've hated Vivendi ever since they killed Sierra Interactive. Seeing the name Vivendi pop in anything is baaaaaaad news, and this is jsut confirmed now. Act-Blizz is not of my liking either, but the move that Vivendi has planned is just waaaaaaay to sleazy. So, we were down to 25 studios in AAA gaming, right? When Act-Blizz dies, how many more will be gone?
Oh dear lord, Vivendi is cannibalizing itself. This is pretty much the textbook case of how the legal obligation towards shareholders hurts business as a whole. Shareholder demands maximum profit RIGHT FREAKING NOW. Company is legally obligated to burn bridges, sell off assets, and 'cash in' goodwill and ongoing development.
The result is a dead golden goose, employees without jobs, and a company with a tarnished reputation unable to make the next insane mandate.
The result is a dead golden goose, employees without jobs, and a company with a tarnished reputation unable to make the next insane mandate.
So who are the other major shareholders? The people who own 39% of the company surely might want to bid on a fraction of those shares, maybe enough to gain a majority? (Would only need 12%) Unless those guys are also looking to sell maybe?
That wouldn't be their primary defense against thisPilkingtube said:
The minority shareholders are entitled to legal proceedings if they feel they're being 'rolled over' by the majority. They'd need to show that they're essentially being stolen from by way of unfavorable stock moves. This was pretty much put into place to make sure the 80s won't happen again.
I mean the US and the FDIC are really on the ball about using ethics laws like this to prevent massive and obvious abuse.
Well big companies like Vivendi are into speculation, and their success comes from being good at it. "World Of Warcraft" is making a ton of money but has seen a massive slide off of subscribers, and a total drought of creativity given that their latest bright idea was to turn a minor humor race people thought might be cool to add to the PC rosters, into a full fledged "Kung-Fu Panda" expansion... (people have been clamouring for playable Murlocs too, but I doubt anyone wants them to create an entire Murloc themed expansion). The FPS/TPS bubble seems primed to pop any day now with people becoming increasingly critical of the genere, it's stagnation, and repetitive nature, even "Call Of Duty" is getting unprecedented flak from it's own fans. The of course there is talk about how "Project Titan" which has been out there in development for years now apparently just got sent back to the drawing board. Something which probably cost Activision/Blizzard a ton of cash, and is making Vivendi nervous given how badly "The Old Republic" bombed despiteAeshi said:
it's pedigree.
In short, I can see what Vivendi is thinking. The trick to making money at this level is to sell companies like "Activision/Blizzard" when they are hot, as opposed to when they are failing. Basically they want someone who views this as a money making machine, and will pay them top dollar for it, right before the floor falls out from underneath it.
All the points above, the sheer hatred Activision inspires, and of course people predicting a crash fueled by an unsustainable model, all probably contribute to the most notable thing here.... nobody is willing to buy Activision/Blizzard. Probably because they notice all of the things that are causing Vivendi to want to sell it.
Raiding Activision's coffers seems like the kind of thing parent companies do when they see a sinking ship and want to save as much as they can. The 400 million they grab is 400 million that won't get sucked into the black hole of a bad development or market crash. It can always be debated as to whether this kind of raiding will cause the failure of a company (becoming a self-fulfilling prophecy) but in the end speculators being right about this kind of thing is why they tend to make the big bucks.
At any rate, I think this is a sign of the upcoming gaming industry crash a lot of people have been talking about. It just isn't the big surprise previous ones were. Vivendi wants out, nobody wants even Activision/Blizzard, and their stock value actually increases (due to perceptions) based on them wanting to sell it....
On a lot of levels I think a gaming industry crash will be a good thing if it happens, it will blow chips as a gamer for a while, but I think gaming will be stronger for it when it inevitably returns.
A CEO's bonus is based on this year's profits. Next year he'll deploy his golden parachute and get a better job with someone else while Vivendi gets carved up in bankruptcy court. Day traders and a lot of other shareholders don't care as well, as they'll bail soon after the price spikes and let suckers take the hit over the long term.viggih7 said:
IIRC there's also a semi-legit psych profile of people in power, called "reign in hell syndrome" or something, where CEOs and that will make things worse for the company and everyone in it just to increase their personal power within the company slightly. People would rather be king of the cesspit than prince of the empire.
tl;dr Individuals in companies encouraged to plunder long-term survivability for short-term gain.
