Activision tried to buy Blizzard before merging with Vivendi Games

(Note: This is the fourth of four news items from my reporting on the Activision Blizzard merger, which closed today. For the bigger picture, check out my story in tomorrow's Daily Variety about the impact of the deal on the entertainment biz, and, my story in weekly Variety about how a single game sparked the biggest deal in videogame history)

Merging with Vivendi Games was not Bobby Kotick's first thought. While talking about the deal today, the Activision (and now Activision Blizzard) CEO admitted that in his first conversations with Vivendi Games CEO Bruce Hack, Vivendi CEO Jean-Bernard and Vivendi Games Chairman René Pénisson, his intention was to buy Blizzard Entertainment. He even lined up financing for the purpose.

"We talked about the opportunity to buy Blizzard and they were adamant that they loved the [videogame] business and were committed to it," Kotick recalled. "They didn't want to sell the business but would entertain other ideas. They were struggling on the console side and needed to diversify into other parts of the business and recognized how difficult that would be independently, which is how we ultimately settled on this structure."
That's a big change from early 2004, when Vivendi tried to sell its videogame business and nobody was willing to buy it. But it just goes to show what the single most profitable product in videogame history, with profit margins of over 50% and generating over $500 million in operating income per year, can do for a company.

Bobby Kotick wanted to buy that game, "World of Warcraft." But as Ubisoft CEO Yves Guillaume succinctly told me when were discussing the deal during a recent interview, something quite different happened: "'One game, World of Warcraft,' bought Activision."