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An SEC filing from major publisher Activision has revealed several additional details on the firm's finances, following its <a href="http://www.gamasutra.com/php-bin/news_index.php?story=10351">recent financial results</a>, including a $99.9 million purch

Simon Carless, Blogger

August 9, 2006

2 Min Read

An SEC filing from major publisher Activision has revealed several additional details on the firm's finances, following its recent financial results, including a $99.9 million total purchase price for Guitar Hero publisher RedOctane. Specifically, the filing reveals of Activision's deal with the company, which also produces dance mats alongside the popular Harmonix-developed guitar sim: "On June 6, 2006, we completed our acquisition of 100% of RedOctane, Inc... for an aggregate accounting purchase price of $99.9 million." This includes $30.9 million in cash, around $30.0 million of Activision stock, and $39.0 million payable in Activision common stock within two years of the closing date. There are also further incentives for RedOctane financial stakeholders: "In the event the net income of the business over a certain period of time exceeds certain target levels by certain amounts, certain former shareholders of RedOctane will be entitled to an additional amount of up to $51.0 million payable in shares of Activision common stock." An interesting aside also mentioned in the filing is the significant remuneration for Activision Publishing CEO Michael Griffith, who joined the company last year from Procter & Gamble. It was revealed: "In June 2005, we entered into an employment agreement with the President and Chief Executive Officer of Activision Publishing, Inc. containing a guarantee related to total compensation. The agreement guarantees that in the event that on May 15, 2010 total compensation [including bonuses and stock options] has not exceeded $20.0 million, we will make a payment for the amount of the shortfall." In addition, a hint as to the upfront pricing of the Bond license was contained within a discussion of licensing revenues, since it was mentioned: "Continued investment in intellectual property licenses. We spent approximately $13.6 million in the quarter ended June 30, 2006 for license agreements granting us long-term rights to intellectual property of third parties, such as our agreement with MGM Interactive and EON Productions Ltd. granting us the rights to develop and publish interactive entertainment games based on the James Bond license." However, it is unclear how much of the $13.6 million was the Bond deal specifically. Finally, the company made some interesting comments on the future of its SKU mix across console and portable, noting: "We expect that net revenues from console titles will continue to represent the largest component of our publishing net revenues with PS2 having the largest percentage of console business due to its larger installed hardware base. With the release of the NDS and PSP platforms, we expect to see a continued increase in our hand-held business in line with the growth in the installed base in comparison to prior periods. Our net revenues from PC titles will be primarily driven by our product release schedule."

About the Author(s)

Simon Carless

Blogger

Simon Carless is the founder of the GameDiscoverCo agency and creator of the popular GameDiscoverCo game discoverability newsletter. He consults with a number of PC/console publishers and developers, and was previously most known for his role helping to shape the Independent Games Festival and Game Developers Conference for many years.

He is also an investor and advisor to UK indie game publisher No More Robots (Descenders, Hypnospace Outlaw), a previous publisher and editor-in-chief at both Gamasutra and Game Developer magazine, and sits on the board of the Video Game History Foundation.

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