Can Activision Blizzard compete with EA for mindshare?
Though the new entity may become the world's largest video game company, it may not be able to supplant the brand recognition of Electronic Arts.
I woke up this morning to news that France's Vivendi has agreed to buy a controlling interest in Activision, perhaps creating the world's-largest independent video game company.
The new entity will be known as Activision Blizzard--a suitable name based on the fact that Activision has the best-known video game brand in the new company, but that Vivendi's Blizzard Entertainment unit also produces World of Warcraft, one of the most successful massively multiplayer online games of all time.
But what is not clear is whether the new company will be able to achieve something that is clearly part of Vivendi's rationale for making the $18.9 billion deal: to become the most visible video game company in the world.
For that, I think, it is still going to need to go through Redwood Shores, Calif., the home of Electronic Arts.
EA may have its problems, what with laid off employees, questions about its ability to create hit original games, and a stock price that had dropped into uncomfortable territory earlier this year before rebounding. But there can be little doubt that it is the best-known brand in the business.
Its games are everywhere: Madden, The Sims, Harry Potter, Need for Speed and so on. But more than that, I think that the name Electronic Arts, or the abbreviation, "EA," are short-hand in many people's minds for the video game industry.
Which isn't to say, of course, that neither Activision nor Vivendi nor Blizzard aren't household names in their own right.
But to me it's pretty certain that, in the United States, at least, EA is the far-better known brand, and will continue to be so for some time.
And in that regard, the new Activision will have to work very hard to associate its hit franchises--Guitar Hero, World of Warcraft, Call of Duty and so on with its brand name in the same way EA's games are with it.
I'm sure that there are those who will argue with my assessment, or even the premise of this story, but when a company like Vivendi spends as much money to make a splash with a transaction like this, you can be sure it's not entirely about the bottom line. It's about perception.
And in this case, I think EA is still going to be top dog in the perception game for some time.
Especially if it decides to follow Vivendi's move by making a major purchase of its own.