In one corner we have Activision, whose lineup includes the super popular Tony Hawk, Guitar Hero, Call of Duty, Doom and Quake series. With an impressive 2.8 billion dollars in revenue and its long lasting affair with video games, ever since the Atari 2600, it is a power to be reckoned with. In the other corner we have Blizzard, with its worldwide recognized AAA Starcraft, Diablo, and Warcraft series. On July 8th, these two super powers will join forces and create the world’s most profitable video game company! (queue fireworks)
"We believe the transaction is set to create a formidable new digital media powerhouse and the most valuable interactive entertainment company worldwide, unlocking the value of industry juggernaut World of Warcraft, and possibly also setting a new benchmark for profit margins among publicly traded video game pure-plays," said analyst Colin Sebastian of Lazard Capital.
"Based on our revised analysis of the earnings power for the combined Activision Blizzard, we are increasing our price target to USD 40, which is based on 26 times the midpoint of our 2009 estimated combined company earnings per share range, and a 25 per cent premium to the sector, justified in our opinion by comparatively higher operating margins and more stable revenue streams."
EA has challenged this position with attempts to acquire Take Two, but that has proved to be difficult to say the least. What is expected from the new Activizzard or Blizzardvision? With so much money being made, let’s see some games with a high production value and with mechanics that will change the way we think of games. That’s the least I can ask from you Actard.
[via GamesIndustry]
