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The Acti-vendi Merger and the Future of VideoGames: Part I

December 7, 2007


There is just a tad of personal irony for me in the industry-changing merger of Activision and Vivendi Games announced a few days ago.

About three years ago I had lunch with Activision CEO Bobby Kotick. When I told him about an investment we had just made in a Massively Multiplayer Online Game company called Turbine Entertainment, he didn’t exactly fall out of his chair congratulating me. In fact, I’d say his reaction was pretty much identical to the scenario imagined by this New York Times article:

“As recently as three years ago, if you told a top game industry executive that your favorite genre was online PC games, you would almost invariably provoke a reaction akin to telling a television mogul that your favorite shows explain the migration patterns of obscure African fauna. In other words, you would get the verbal equivalent of a condescending pat on the head — “Oh, that’s nice” — while the executive looked around for someone with something more relevant to say.”

Over the ensuing three years the MMO market, fueled by the spectacular success of Vivendi/Blizzard’s MMO Worlds of Warcraft, has become hot.  So hot, in fact, that Kotick himself has gone and merged with Vivendi to create an 18 billion dollar game industry titan.

But beyond the scale of the merged entity, the transaction puts a fine point an an increasingly important trend which will remake the face of the videogame business over the next five years.

It is no secret that more and more of the world’s time is being spent online, and that the range of online entertainment is eating into the time historically spent watching TV in a major way.

Nor is it a secret that videogames played on the Xbox or PS3 have also displaced a huge chunk of TV time.

But these two things have emerged separately.  Sure, game consoles now include a web connection, but console gameplay has remained a very different user experience than the ultra-connected social experience that has emerged on the web.

This is beginning to change, and I think the change is going to have tremendous consequences both on the game biz and on the web.

The change is coming from two directions.

First, the online experience is just beginning to go 3D.  Second Life is certainly the most visible of the new category of “virtual worlds,” an online experience that has 3D graphics and physics that you would expect from a videogame. Today, Second Life remains an island — a virtual world that exists only for those web surfers who sign up, download the Second Life client, and enter the world. But where this is heading is, I think, pretty clear: more and more of the web experience itself will begin integrating 3D virtual reality. Today kids on social networks like Facebook and MySpace, that are entirely two dimensional experiences. But over time you can bet these environments — or the ones that replace them — will become 3D.

Coming from the other direction, videogames are going to become increasingly connected social experiences.  MMOS like World of Warcraft, and like the Lord of the Rings MMO recently released by my portfolio company Turbine Entertainment, are the first step in this. But, to date, event the most successful of these games like Warcraft have been played by a fairly narrow “hard core” gamer audience. The games are harder to play than your typical videogame and take lots and lots of time to “level” or progress to more advanced stages. What you can expect to see is mainstream game titles having more and more real time interplay between gamers, and more and more social elements, and MMO titles offered not just to hardcore PC gamers but also to more mainstream console audiences.

Activision CEO Bobby Kotick certainly sees this, and his merger with Vivendi certainly is a harbinger of this emerging intersection between MMOs and console videogames.

But the hard part still is to come. Yes, Activision has a few console blockbusters, and yes Vivendi’s Warcraft is a fantastically successful MMO.  But the big win here is developing games that are both MMOs and console titles. This nobody has yet done. And for good reason: it’s not easy. It will be fascinating to watch how Acti-vendi fares trying to get there.

Meanwhile, while Goliath heads down this path, so is David — little old Turbine, which already is on its way down this path. It’s early to tell, but there are a few of us out here who are expecting and hoping that Turbine gets there first.

In part II, I’ll speak with Turbine CEO Jim Crowley. Back at you soon.


Post a comment
  1. December 12, 2007

    Final Fantasy XI has over 500,000 users many of them on console helping it become one of the top mmorpg’s in Japan. Might not seem a lot compared to WoW but it does prove that console MMORPG’s are possible. Having played MMORPG’s myself for thousands of hours I can tell you console experiences that are as good as PC’s can be managed. You just need to be innovative with how you will hotclick on a console what you would do on a keyboard on a PC MMORPG.

    Halo MMORPG would be yummy and it has the brand recognition to make a cultural shift on to the ocnsole for MMORPG’s. That would be fitting. After all Halo broke the taboo on how FPS’s could not translate to consoles in a superior manner.

    It will happen. The platform doesnt matter. Game needs to be good.

  2. December 31, 2010

    Thanks for the tip about MMORPG games. In fact, i’ve tried several different MMORPGS games over the years. I found this blog post very informative. Thanks 🙂

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