Blizzard's role in Activision Blizzard according to Mike Morhaime and Bobby Kotick

(Note: This is the third 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)

OK, so this one isn't quite so newsy. But since there are a lot of Cut Scene readers who are big "World of Warcraft" fans, I thought it was worth dropping all the bits and pieces I gathered today about what Blizzard's role will be in the newly merged company and how it all came together. So here are some relevant quotes from Blizzard CEO Mike Morhaime and Activision Blizzard CEO Bobby Kotick...

Mike Morhaime:

-They let me know very early on [about the potential merger] and of course my first reaction was, "OK, I'm interested in talking to the Activision guys and hearing what they have in mind." Vivendi and Vivendi Games were very interested in our thoughts on the whole thing. All sides made it clear that unless Blizzard was supportive of the deal, nobody wanted to do it.

-I really liked hearing from Bobby [Kotick] about his level of appreciation and respect and understanding of how unique Blizzard is in the gaming industry and how valuable the culture we've cultivated is... We have enjoyed a great deal of creative autonomy and it’s important that our parent company understands the culture that is Blizzard. I wanted to make sure their goals were consistent with sustaining that. And so once I felt comfortable that they were, we were very excited.

-One thing they offer us is now we are part of a pure play videogame software company that’s publicly traded on the Nasdaq, so any of our employees and players now have a way of investing in Blizzard Entertainment to share in our success. We're also able to use that public currency to attract and retain the best game development talent.

-One of Vivendi’s reasons for wanting to do this is that it unlocks a lot of hidden value that's been buried inside Vivendi. [Because Blizzard was a small part of a large company whose operations are largely unrelated to videogames]

-The involvement I anticipate us having [with other Activision projects] is picking each others brains. If we run into a difficult problem that has been solved on the other side, then we can pick up the phone. I wouldn’t foresee us doing any work for their games.

 

-I will report directly into Bobby...  Activision Blizzard is the name of the public company and it's called that as a reflection of the fact that the two main divisions are Activision publishing and Blizzard Entertainment. They are two sister companies with certain shared services supporting both brands.

-My primary focus is on the Blizzard Entertainment business and how the Activision Blizzard organization is structured to support the Blizzard Entertainment business... Of course, I'm very interested in Activision Blizzard succeeding as an organization. if there are big strategic issues that come up, I’m happy to participate in the discussion.

Bobby Kotick:

 

-I have known the Blizzard team for many years. We have had conversations over the years. They were contract developer for us when we first bought control [of Activision]. I spent a little time with Mike Morhaime and his team and found they are completely aligned with us. We realized it would be impossible to compete [with 'World of Warcraft'] and so ultimately my only issue was making sure they were committed for at least five years. (For more on the Blizzard heads' new contract, go here.)

-Blizzard is not a [development] studio, it's a publishing company. Their business generated over $500 million in operating profits last year... They are treated as independent business with a CEO and leadership team... Those guys have more than demonstrated their ability to allocate capital intelligently. They focus on a very small number of known franchises and have a great pipeline. That was one of the things made the transaction really easy is knowing philosophically that we were right in sync.