Episode Details

TCW Podcast Episode 260 - Vivendi Electric Boogaloo

How does a Canadian liquor company end up owning Universal Studios and, eventually, help create Activision Blizzard? Seagram chased diversification as liquor sales softened, tried to take over Conoco, and instead wound up with a 25% stake in DuPont that generated most of its earnings. Edgar Bronfman Jr. sold that stake to buy MCA from Matsushita, inheriting a mismanaged Universal. He then doubled down on music with a $10.6 billion PolyGram deal just as Napster, the dot com bubble, and changing listening habits blew up the old record business model. With media stocks riding high, the rest of the Bronfman family wanted out, and Jean-Marie Messier at Vivendi stepped in, using Canal+ and an all‑stock transaction to fold Seagram into Vivendi and create Vivendi Universal. On the games side, Havas Interactive and the former CUC and Cendant software assets were combined with Universal’s own games business, including the franchises of Crash Bandicoot and Spyro the Dragon, under a new label: Vivendi Universal Games. Then the bubble burst, Vivendi’s debt and deceptive cash accounting caught up with Messier, and he was forced out, leaving his successors to sell assets and manage the fallout. Inside the games group, Blizzard’s success defined the division, culminating in World of Warcraft’s launch and the later decision to combine Vivendi’s games business with Activision. That deal created Activision Blizzard, gave Vivendi a way to tap cash when its telecom business went bad, and set the stage for Activision Blizzard's eventual separation from Vivendi. Vivendi made one last, mostly unsuccessful push into games through moves on Ubisoft and the takeover of Gameloft.

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Spyro the Dragon (PSX):