“Activision Blizzard” is the new 900 lb gaming gorila.

Electronic Arts is no longer the biggest video game company as a new merger between Activision and Vivendi, parent company to Blizzard Entertainment, was announced yesterday in a press release on Business Wire:

Vivendi and Activision to Create Activision Blizzard – World’s Largest, Most Profitable Pure-Play Video Game Publisher

Combination Brings Activision’s Best-Selling Video Games, Including Guitar Hero®, Call of Duty®, and Tony Hawk, Together With Vivendi Games’ Portfolio of Leading Franchises, Including Crash BandicootTM and SpyroTM, and Blizzard Entertainment’s® StarCraft®, Diablo® and Global #1 Subscription-Based World Of Warcraft®

Vivendi to Contribute Vivendi Games Valued at $8.1 Billion, Plus $1.7 Billion in Cash in Exchange for Approximately 52% Stake in Activision Blizzard at Closing; Total Transaction Valued at $18.9 Billion

Activision Blizzard Will Commence Post-Closing Cash Tender Offer for Up to 146.5 Million of its Shares at $27.50 per Share, Representing 31% Premium for Activision Stockholders Based on 20-Trading Day Average

Transaction Will Unlock Value of Blizzard Entertainment’s Massively Multiplayer Online Games Business and Will Be Accretive to Stockholders of Activision and Vivendi

SANTA MONICA, Calif. & PARIS—(BUSINESS WIRE)—Activision, Inc. (NASDAQ: ATVI) and Vivendi (Euronext Paris: VIV) today announced that they have signed a definitive agreement to combine Vivendi Games, Vivendi’s interactive entertainment business—which includes Blizzard Entertainment’s® World of Warcraft®, the world’s #1 multi-player online role-playing game franchise—with Activision, creating the world’s largest pure-play online and console game publisher. The new company, Activision Blizzard, is expected to have approximately $3.8 billion in pro forma combined calendar 2007 revenues and the highest operating margins of any major third-party video game publisher. On closing of the transaction, Activision will be renamed Activision Blizzard and will continue to operate as a public company traded on NASDAQ under the ticker ATVI.

The deal still has to be approved by Activision’s stock holders, but if it goes through it’ll create a new giant publishing house. Benefits above and beyond simply being the biggest will include the developers of Guitar Hero gaining access to the huge library of Universal Music Group. Fans of Blizzard’s games were posting to the forums yesterday asking what kind of an impact this would have on Blizzard’s games and were reassured it wouldn’t change things at all. At least for the moment. The above is only a small part of the full press release so if you want to read the whole thing just click the link above.

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