Activision Appears to be in BIG Trouble

Gryphon · Jul 10, 2013

http://playeressence.com/activision-appears-to-be-in-big-trouble/#more-20781

Some new information has broke on Activisions corporate situation, and its not looking good. Hit the link to read more on the breaking news.

Via GameInformer:

After failing to find a buyer for its controlling shares in Activision Blizzard, Vivendi may take out a gigantic loan in the publishers name for some much-needed financial relief.

According to the Financial Times (via Reuters), Vivendi will gain new managerial powers over Activision Blizzard tomorrow, the closing date of the 2007 Activision/Vivendi merger. The merger gave Vivendi a 61-percent stake in Activision.

Speaking with Joystiq, an analysts describes a potential scenario in which Vivendi can now take out a massive loan in Activisions name and then pay itself an equally sizable dividend. Borrowing of $5 billion would permit a dividend of $8.5 billion, the analysts states. As the holder of 61 percent of Activisions common stock at March 31, 2013, we estimate Vivendi would receive approximately $5.2 billion in cash, easing its mounting debt concerns. The move would leave Activision with a mountain of debt to overcome, while Vivendi uses the payoff to get its own finances in order.

In May, Activision announced a strong financial start to 2013, but warned that the second half of the year would be challenging due to competing IPs. The financial move Vivendi is reportedly considering could have a serious impact on Activisions outlook for the year, but that may be a trade-off Vivendi is willing to take.

[Source: Financial Times, via Reuters Additional information via Joystiq]

GameInformers Take

While some gamers would celebrate any financial hardship that Activision may find itself in, I think todays report is terrible news. Activisions latest earnings call reiterated the companys strategy to avoid making risky decisions. Gamers may decry the companys reliance on annual sequels, but those games which still provide plenty of enjoyment to players provide a steady source of income that keeps hundreds of talented programmers and artists in business. Despite Activisions efforts to avoid it, the company may get stuck with a huge amount of debt, through little fault of its own. Only Vivendi stands to gain from that scenario
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saansilt · Jul 10, 2013

Read this a few days back.
Its a huge burden for activision.
If they can't pull through gaming is in for a shock.

Hoggy110 · Jul 10, 2013

But...don't Activision have $20 billion from COD?

saansilt · Jul 10, 2013

Hoggy110 said: ↑

But...don't Activision have $20 billion from COD?
Click to expand...

Its still a debt they are getting on themselves.
Also, profits=/=gross sales.

MasterChief3624 · Jul 11, 2013

I have to be honest: I have no idea what any of that article said.

As much as I hate Activision and their lack of ingenuity and stagnation of innovation in the gaming industry, losing them would be... bad. They are needed for gaming, hate them or not.

I'm sure whatever losses they incur from this, they'll be able to bounce back, though. Come on. Call of Duty.

Activision Appears to be in BIG Trouble

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