Bosanac wrote on Jul 11, 2012, 11:22:
I don't get it.. Blizzard is a cash cow.. COD is a cash cow. Why call it liability?
ASeven wrote on Jul 11, 2012, 12:43:Parallax Abstraction wrote on Jul 11, 2012, 11:36:ASeven wrote on Jul 11, 2012, 11:02:
Moody finds Activision a liability, and if they find the most financial solid publisher in gaming a liability they find the whole market a liability.
That's not what that means necessarily. Liabilities in accounting terms just means debts. For example, your credit card bills, car loan, mortgage etc. are all what banks call "liabilities" because it's money you owe. From what I understand, Vivendi's in pretty heavy debt right now largely due to some of their other operations that aren't profitable and they're looking to sell Activision because it's one of the few major moneymakers they have and they want the cash infusion to prop up the rest of the company. Not to say that they maybe don't also want out of it because they see the AAA market declining but Moody's saying that Activision wants to reduce liabilities likely just means reduce debt. I just checked with my Chartered Accountant girlfriend and she said that's likely what they mean. Doesn't make a huge different to me either way, just food for thought.
EDIT: Dammit Beamer!
Yes, true, Vivendi is a skinking ship too but the Moody report says for Vivendi to get rid of liabilities in the financial accounting sense while at the same time damning the industry a bit by implying it no longer is a profitable venture for investors to go there. Hence adding 2 plus 2 together I reached the conclusion that Moody may mean Activision is a liability in both senses. They know that they cannot live much longer milking the same IPs and showing no evolution or innovation.
Other funny things have happened like Ricitello, EA CEO, selling all his EA stock recently and then confessing he's afraid of his job security to Pachter which he promptly spread to the media.
Even the CEOs know what's coming.
ASeven wrote on Jul 11, 2012, 13:08:
Though I too wouldn't mind Valve owning Actvision. It sure beats MS owning Activision that's for sure.
theyarecomingforyou wrote on Jul 11, 2012, 13:40:20-30% might be right down generous of Valve. Most of the big Japanese digital sites are in the 45-60% range.
Valve must make a huge amount. Assuming the major publishers negotiate better deals than the standard 30% cut, I'd imagine Valve is still taking 20% of the sale price for themselves and the operating costs will be a fraction of that. Given the number of years that Steam has been going - and doing incredibly well - I'd assume they have a decent stockpile of money.
theyarecomingforyou wrote on Jul 11, 2012, 13:04:
...the first thing they'd do would be to kill the PC versions of all games.
theyarecomingforyou wrote on Jul 11, 2012, 13:40:ASeven wrote on Jul 11, 2012, 13:08:Valve must make a huge amount. Assuming the major publishers negotiate better deals than the standard 30% cut, I'd imagine Valve is still taking 20% of the sale price for themselves and the operating costs will be a fraction of that. Given the number of years that Steam has been going - and doing incredibly well - I'd assume they have a decent stockpile of money.
I don't think Valve has the financial capability to buy those stocks. Or rather, they can buy the stocks but would more than likely require a massive loan and/or place many of their assets into mortgage in order to round up the necessary money.
ASeven wrote on Jul 11, 2012, 13:08:Valve must make a huge amount. Assuming the major publishers negotiate better deals than the standard 30% cut, I'd imagine Valve is still taking 20% of the sale price for themselves and the operating costs will be a fraction of that. Given the number of years that Steam has been going - and doing incredibly well - I'd assume they have a decent stockpile of money.
I don't think Valve has the financial capability to buy those stocks. Or rather, they can buy the stocks but would more than likely require a massive loan and/or place many of their assets into mortgage in order to round up the necessary money.
theyarecomingforyou wrote on Jul 11, 2012, 13:04:
Please let it be Valve that buys them.
Please let it be Valve that buys them.
Please let it be Valve that buys them.
Please... okay, you get my point. The LAST company I would want to buy Activision would be Microsoft, as the first thing they'd do would be to kill the PC versions of all games.
avianflu wrote on Jul 11, 2012, 12:52:
games sales are way down across the board and since the recession started. It is reasonable in that light to put Activision out there and see if there are any buyers willing to throw in a lot of coin.
It is not a firesale.
Larger companies do this all of the time and often there are corporate tax incentives, depending on how exactly the company is sold, to make a sale even more interesting to Vivendi's shareholders.
Parallax Abstraction wrote on Jul 11, 2012, 11:36:ASeven wrote on Jul 11, 2012, 11:02:
Moody finds Activision a liability, and if they find the most financial solid publisher in gaming a liability they find the whole market a liability.
That's not what that means necessarily. Liabilities in accounting terms just means debts. For example, your credit card bills, car loan, mortgage etc. are all what banks call "liabilities" because it's money you owe. From what I understand, Vivendi's in pretty heavy debt right now largely due to some of their other operations that aren't profitable and they're looking to sell Activision because it's one of the few major moneymakers they have and they want the cash infusion to prop up the rest of the company. Not to say that they maybe don't also want out of it because they see the AAA market declining but Moody's saying that Activision wants to reduce liabilities likely just means reduce debt. I just checked with my Chartered Accountant girlfriend and she said that's likely what they mean. Doesn't make a huge different to me either way, just food for thought.
EDIT: Dammit Beamer!
Beamer wrote on Jul 11, 2012, 11:33:ASeven wrote on Jul 11, 2012, 11:02:
liability.
This word does not mean what you think it means.
In general, though, Vivendi is a company that's having significant issues. Why are they seeking to offload Activision?
1) It's not core to their business. Yes, it makes money, but they're being pushed to focus on their core, which is not video games. This means offloading businesses that are distractions, even if profitable ones. Markets often push for this, which can have bad consequences, as offloading even a minimally profitable business, or minimally unprofitable one, can have huge repercussions
2) Activision, being profitable, shoudl be one of the easiest for them to offload, as there are people out there that want it
3) How do you get rid of liabilities? Paying them. How do you pay them without incurring new liabilities? Cash. How do you get cash? Selling something.
Please stop using "liability" if you don't understand the concept.
Bosanac wrote on Jul 11, 2012, 11:22:Because Blizz alone is not enough and Activision has no substitute when people start losing interest in CoD, which WILL happen. Activision is so dependent on CoD, its no longer healthy.
I don't get it.. Blizzard is a cash cow.. COD is a cash cow. Why call it liability?
ASeven wrote on Jul 11, 2012, 11:02:
Moody finds Activision a liability, and if they find the most financial solid publisher in gaming a liability they find the whole market a liability.
ASeven wrote on Jul 11, 2012, 11:02:
liability.