Rumor Alert: Those Other Guys

Long time, my friends. Life gets crazy and one finds themselves either at work, asleep, or still trying to play the game that I made this blog for. Hello again.

A few months ago I was inspired to make an emotional post about Blizzard as a company because of the shocking news that they laid off 600 of its employees. Scary, but not altogether unexpected, which I also went into detail about in the post.

As I've said before, I always have to remind myself that Blizzard is not just Blizzard Entertainment. The company does a good job of making you think that while you're playing 'Blizzard' games or browsing the Battle.net site, but the reality is that Blizzard is subsidiary, co-dependent on Activision, and when one side starts slipping, the other has to either bring up the slack or trim the rot.

You can read more after the jump.

Blizzard Entertainment as we know it has never been a company on its own. We like to think so, as I've stated above, but they've always been 'owned' by someone, if you will. Look at it this way: 3 college graduates have this cool idea for a company. In order for any business to get off the ground, one needs money to give it that initial push, right? These three guys started out their little brainchild by making ports for other game studios. Once they got enough money, they were able to start developing their own games. They were able to attract the attention of publishers, and this little company was suddenly worth a few million and some change. Awesome, yeah?

It was 1994 when this little company called Silicon & Synapse was picked up by Davidson and Associates for 6.75 million dollars. That same year, the little company changed its name to Chaos Studios, and finally to Blizzard Entertainment. Not too long after is when Blizzard released their first game within the Warcraft universe, Warcraft: Orcs & Humans. That eventually led to Warcraft II and III, then World of Warcraft. (I'm not going to go into Diablo and Starcraft, but they get tossed in there too.) Blizzard has been sold and moved around to different companies since then, and it now sits where it does today, as a subsidiary of Activision-Blizzard, under the conglomerate of Vivendi.

My point is, Blizzard needs to make money in order to stay afloat. They were smushed together with Activision to get access to more finances, not lose them... and I'll get more into that in a moment. It's like going to the bank and taking out a loan. Vivendi says, "Sure, we'll give you more monies to make your games, but you need to be able to pay that back later." Blizzard says, "Okay, we'll get to it. Now that we have money to do whatever we want with, we'll get back to you." Blizzard then churns out games and trading cards and all sorts of stuff to make a profit for both themselves and Vivendi. If Blizzard wasn't successful there would be no point in owning them. Making a profit isn't a bad thing, but when your parents aren't making as much money as they used to and you're still living at home... well, things get a bit sticky.

Vivendi as a company was in mega debt back in 2002. Billions of dollars in debt, actually. The current former chief executive, Jean-Bernard Levy, was brought in to help get that debt down, and the merger of Blizzard with Activision is a result of that. Even though Blizzard is its own entity within this conglomerate, they  still have to pay rent to dad. As I was saying before, the bills aren't getting paid and you're still living at home. You don't know where to go if the house goes under, so you keep paying rent, and you might have to start paying a bill or two because if you don't, everyone gets pitched out on the street. My layman's terms are great, I know.

I've seen on the forums talk about Vivendi selling Activision-Blizzard, and last night, WoW Insider made a post about it on their site, which you can read here. Apaprently, Levy stepped down as bossman, and Businessweek goes a bit further into detail about why he did. The company put out a statement, saying, "[There was] a divergence of views on the strategic development of the group" and Businessweek goes on to say, "The company's stock has also been stagnant". You can read it here, and also take note of the court ruling at the bottom saying Vivendi must pay $950 million to some dudes in Colorado over a dispute that's gone on for years. The post from Bloomberg can be read here.

While Levy stepping down is true, no one knows exactly why he did it, and no one knows if Activision-Blizzard is getting sold off to someone else. Blizzard has really been tightening their belt lately, but they're still determined to put out an expansion while juggling Diablo III, the next Starcraft expansion, and the development of its next big thing, 'Titan'. Diablo III was pushed out before it had everything they wanted to include in it (PvP), no doubt to get some money to sigh a breath of relief with the current state of the economy and their conglomerate. It's still coming though, just not when people want it (right now). 

We might not know the future state of Blizzard down the road, but we'll have our expansions in due time. Dark days don't always mean the apocalypse, but part of me can't help but feel that the company has got some major bumps ahead.