Activision Plans to Enable "Warcraft" Addicts

Farewell, Activision (Nasdaq: ATVI). Hello, Activision Blizzard.

The union of Activision with Vivendi Games is a done deal. Activision shareholders approved the deal yesterday. It should close today.

You won't need to edit your ticker symbol feed. This will still be ATVI. However, the company will be changing its name to Activision Blizzard. That is a well-earned nod to Blizzard's World of Warcraft, the revolutionary online game that made merging with Vivendi's game unit so compelling for Activision.

France's Vivendi will receive 295.3 million freshly minted Activision shares in the transaction. It will also spend $1.7 billion to buy another 62.9 million shares. Activision's name -- and ticker symbol -- may come first, but it will be Vivendi that owns 54% of the outstanding shares.

The market has taken to the deal since it was announced back in December. Vivendi's high-margin online juggernaut will fit in nicely alongside Activision's popular portfolio of franchises that includes Guitar Hero, Call of Duty, and Tony Hawk.

Once all of the new shares are handed out, Activision will also topple Electronic Arts (Nasdaq: ERTS) to become the world's most valuable video game software company. Why do think EA is trying to wrestle away Take-Two Interactive (Nasdaq: TTWO), anyway? Even if EA already has some skin in the World of Warcraft addiction (a.k.a. "Warcrack") -- with a small stake in The9 (Nasdaq: NCTY), the publisher that has licensed World of Warcraft in China -- it has some ground to make up.

With companies like MTV rocker Viacom (NYSE: VIA) and kid-oriented LeapFrog (NYSE: LF) all angling for bigger plays with young gamers, the pressure is on for the existing developers to bulk up quickly.

Activision Blizzard makes sense. If I'm right, it also may be just the beginning.

More ways to get into the game:

• Blizzard Has Investors Singing "Let it Snow"
• What I Like About You, Activision
• Your Move, Activision