Vivendi Shows Strong Financials On WoW Success

French-headquartered media giant Vivendi, which owns multiple subsidiaries Universal Music, cable and satellite TV business Canal Plus, and mobile business SFR, as well as game unit Vivendi Universal Games, has reported its final yearly results for 2005, revealing an overall slight dip in profits, but a spectacular rebound for its VU Games division. According to the firm, overall Vivendi revenues rose to 19.48 billion euros ($23.13 billion) from 17.88 billion euros, but profits dropped somewhat to 3.15 billion euros ($3.74 billion) from 3.77 billion euros, mainly due to one-time gains in previous results. However, Vivendi Universal Games' profits have increased to 41 million euros ($48.9 million), up dramatically from a previous year loss of 203 million euros ($241.9 million). The reason for the rebound was explained as "a better balanced portfolio of products thanks to the tremendous on-line activity development with the exceptional success of World of Warcraft", though it seems likely that the 6 million WoW subscribers are responsible for much of the company's current profit surge. However, VU Games also pointed to lower costs resulting from the global turn-around plan executed in 2004 also impacted positively the earnings from operations, and releases contributing to the strong performance including 50 Cent: Bulletproof, Robots, Hulk II, F.E.A.R. and Crash Tag Team Racing, as well as the North America distribution of Delta Force: Black Hawk Down and FlatOut. Increased product development costs linked to recently acquired studios (Radical, Swingin' Ape, Swordfish and High Moon), were also mentioned in the results, which make it clear that VU Games is continuing to ramp up to produce further blockbusters to help back up the success of World Of Warcraft.