Per the Wall Street Journal, French giant Vivendi is set to purchase a majority stake in Activision, Inc. which will add hits such as “Guitar Hero”, “Tony Hawk” and the “Call of Duty” series to its existing gaming portfolio. I believe this is a good move by the French company, which already owns online gaming bellwether Blizzard.
Why is this good? Vivendi already has a huge online gaming footprint with World of Warcraft. Now they are purchasing strong brands with a following which they can slowly transition to a web format. When this happens (and even prior to it) the new in game advertising model will shine. Games where ads are “natural” and don’t provoke gamer mutiny (i.e., signs and billboards on the street in Tony Hawk’s skateboarding game) will take windfall profits. They can even throw an ad platform like Google Adsense into the mix as well, which will further boost revenue. So, watch this space - if executed correctly, Vivendi can reap huge benefits from this acquisition.
Tags: Investing in Stocks, software