Pachter: Activision Blizzard spinoff 'far more likely' than Vivendi sale

by Alexander Sliwinski on Jul 3rd 2012 8:00AM

Wedbush analyst Michael Pachter has weighed in on recent speculation suggesting Vivendi would get rid of its stake in Activision Blizzard, following mounting reports that the French conglomerate is trying to sell the game publisher.

Although a sale is "likely the preferred route" for Vivendi, Pachter wrote in a investor note, there aren't any "readily apparent buyers." Running through the list of suitors, it's noted that companies like Tencent Holdings have reportedly payed out $400 million and $600 million to acquire Riot Games and a minority stake in Epic Games, respectively, but those numbers still pale in comparison to Activision's worth at over $10 billion.

Acquisitions by Electronic Arts, Time Warner and Disney usually stay below a billion. Viacom did a $500 million write-off on its Harmonix debacle. It's also unlikely that any of the console manufacturers would purchase Activision Blizzard, since they would have to cannibalize sales. Activision's franchises du jour, like current champ Call of Duty, make so much money because they are available on every major platform.

Pachter believes the more likely outcome is a spinoff of Activision Blizzard. It would require some fancy financing on the back end, but it would give Vivendi an estimated $5 billion in cash, easing its personal burden. After the spinoff, Pachter feels Activision's shares would rise according to how much cash the company generates every year, paying off its debts. Wedbush maintains an "outperform" rating for Activision Blizzard.

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[NGP] NGP Launch Likely Delayed

[NGP] NGP Launch Likely Delayed
Obviously the horrific earthquake/tsunami disaster that befell Japan in March has had far more tragic effects than its impact on the video games industry, but already the disaster has caused delays (MotorStorm Apocalypse), cancellations (Disaster Report 4), server interruptions (Final Fantasy XIV), and various other complications for the industry.

Add the impending launch of Sony's new handheld, codenamed the NGP, to the list. President of Sony Computer Entertainment America Jack Tretton has stated that due to production complications resulting from the quake, the NGP will likely reach only one region in time for the holidays this year. Now Sony has never officially announced a release date for the device, however they had previously indicated their intention to launch in more than one territory for the holidays, if not worldwide. Tretton did not specify which region may be the first to receive the NGP.

The delay could have consequences in the handheld war with Nintendo's recently-launched 3DS, as analyst Edward Woo of Wedbush Securities states: "It raises the bar on the competitive issues that Sony is going to have to hurdle. As it is now, it’s already going to be almost eight months behind Nintendo, and a delay could push that to a year.”

Written by: Mike Glubish

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Sony NGP announced, likely to lose to 3DS

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