CNN/Money  
graphic
Commentary > Game Over
graphic
Vivendi's game gem gets tarnished
Departure of key gaming personnel may make it even harder to sell gaming unit.
July 1, 2003: 2:19 PM EDT

NEW YORK (CNN/Money) - As part of its asset divestiture, Vivendi has been trying to sell its gaming unit for the better part of the past year. Monday, the asking price on that unit probably dropped.

The co-founders of Blizzard Entertainment's Blizzard North unit - as well as a prominent vice president who served as the public voice of the company - shocked Vivendi and the gaming world by resigning from the gaming powerhouse they helped build. The Blizzard North unit was responsible for creating the 'Diablo' franchise, one of the most successful games in the industry's history.

Blizzard is the crown jewel in Viviendi's gaming empire. But analysts say it may not be worth as much today as it was last week.

"Losing those guys certainly diminished the appeal to any prospective buyer, such as Microsoft (MSFT: Research, Estimates) or Electronic Arts (ERTS: Research, Estimates)," said P.J. McNealy, an analyst with American Technology Research. "You lose them, you lose 'Diablo', which is one of the cornerstones of the business."

Blizzard North co-founders Erich Schaefer, Max Schaefer and David Brevik, along with vice president Bill Roper resigned abruptly on Monday.

The 'Diablo' franchise is one of the best selling in the gaming industry's history.  
The 'Diablo' franchise is one of the best selling in the gaming industry's history.

Vivendi Universal Games, which also includes Sierra Entertainment, is the world's second largest maker of games for the personal computer and operates the Internet's largest free online gaming site. It has annual revenues of $600 million.

Despite that, the division has not attracted the buyer interest Vivendi was hoping for. The company initially valued the gaming unit at $1.95 billion. Within the last two weeks, though, it had lowered its expectation on bids to $800 million. Unable to find a buyer willing to pay that price, it quietly put the sale of the unit on hold and focused instead on the sale of Vivendi Universal Entertainment, according to Reuters.

The pending sale of the gaming division was a major factor in the decision to leave Blizzard and Vivendi, Roper told me Tuesday morning. The quartet was seeking a higher level of involvement with Vivendi, but grew frustrated with the lack of response.

Bill Roper  
Bill Roper

"If we know that something's going to be happening, we want to have a direct pipeline to talk to someone who's above Blizzard," said Roper. "We wanted to be able to have that level of participation and communication with Vivendi (V: Research, Estimates) and to be able to offer some insight and some knowledge in what they're thinking about in terms of a sale, particularly with Blizzard. And for the four of us, that opportunity wasn't going to be made available."

Almost immediately after word of the resignations got out yesterday, the rumor mill began spitting out wild conspiracy theories. One of the most popular was the Blizzard North co-founders and Roper had learned of the gaming unit's likely buyer and quit, feeling their creativity might be harnessed. Not true, said Roper.

"I wish we had gotten wind of anything," he chuckled. "No idea. No clues. No inklings. To be honest, that's part of the problem. What we know about the sale is what we read off the Internet and in the magazines and newspapers."

A Vivendi Universal spokesperson said the company does not comment on terms of the sale of the gaming unit.

One of Diablo II's cinematic quality cut-scenes.  
One of Diablo II's cinematic quality cut-scenes.

Later Tuesday, the now former-Blizzard employees will sit down for the first time to discuss and name their new game development company. None of the four were under contract nor were they bound by non-compete agreements. And all, he said, are eager to start working on a new product.

While it's too early to even speculate what that product might be, Roper said the one of the company's chief focuses right now is to maintain good ties with Blizzard. The departures, he said, were very amicable and it's certainly possible the two parties could work together again in some form or fashion.

"To be quite honest, if we're out looking for a partner or a publisher or distributor, there's really no better name you can have on the box than Blizzard," he said. "I wouldn't have any problem going and talking too those guys about that sort of arrangement."

EXTENDED PLAY
graphic
Click for previous columns

Roper was humble when I asked him about analyst speculation that Monday's departures will result in a lower sale price for Vivendi Universal Games, saying that wasn't the intent of the Monday's action. Still, he said, if that does prove true, he hopes it will underline the importance of the development community.

"Hopefully, what that will point out to the industry is the fact that the success of games isn't just the name on the box, the franchise or that sort of thing - it's the people who make the games," he said. "Just like you want Arnold Schwarzenegger to do your film, just like you want Steven King or J.K. Rowling to be writing your book, you want the best possible people making a game for you. ... People are important."  Top of page


Morris is Director of Content Development at CNN/Money. Click here to send him an email.




  More on COMMENTARY
Yes Virginia, there is a Santa Claus rally
Thanks for nothing, Corporate America
It's not just the economy, stupid
  TODAY'S TOP STORIES
7 things to know before the bell
SoftBank and Toyota want driverless cars to change the world
Aston Martin falls 5% in its London IPO




graphic graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.