Ubisoft Takes Massive Off Activision's Hands

When a couple moves in to live together, the old wagon-wheel coffee table or never worn clothes get tossed. Some things just don’t fit together. Others have to go to make room for the new. The same process applies to corporate mergers.  Overlapping jobs or assets that don’t match the new coupling get discarded.

Last July,  when Activision (ATVI) and Vivendi Games combined to form Activision Blizzard, there was no doubt some Vivendi Games properties would meet this unpleasant end. Reviews were already being conducted. Staff “realignments” were in the works. “Options being explored.”

The questions were what would go, when and, for the lucky few to find new homes - where.

Tuesday, the fate of Vivendi’s Sweden based Massive Entertainment studio was finally revealed. It will be let go, but saved. Subject to terms not disclosed, Ubisoft (UBSFY.PK) has agreed to buy the critically acclaimed studio.

In a statement, Christine Burgess-Quemard, executive director of worldwide production studios at Ubisoft, said that Ubisoft’s strategy “is to ensure the strength of our worldwide creative teams.  Massive has put together a group of some of the most confirmed and recognized creators in the industry. Their talent and innovation will allow them to seamlessly integrate into our worldwide network of production studios.”

Such integration was apparently not in the cards at Activision Blizzard. 

Activision (now Activision Blizzard) has had 16 years of margin and revenue growth. As discussed by management in a recent earnings call, this was achieved, in part, by keeping a laser focus on developing brands that have the potential to live for ten years or more following launch. Experimental IP is chosen carefully and assets with lesser potential are dropped. Massive apparently didn’t fit Activision Blizzard’s strict criteria.

Financial terms of the deal weren’t disclosed.