Acticision Bought Red Octanefor $100m

[Paradox0]

Woops ment to say Red Octane(not even a full cup of coffee awake)

As you may recall, during E3 week this year Activision announced the acquisition of Guitar Hero publisher RedOctane. Considering how popular the guitar music game has been, there's no doubt that the purchase instantly gave Activision a leg up in the music-based game market.

"Our acquisition of RedOctane perfectly aligns with Activision's strategy to broaden its portfolio by entering new genres that have strong global appeal," said Ron Doornink, Director and Strategic Advisor, Activision, at the time of the acquisition.

But was this purchase worth $100 million? That question probably won't be fully answered for years, but we now know thanks to Activision's latest filing with the Securities and Exchange Commission that the company paid a whopping $99.9 million for RedOctane, "consisting of $30.9 million in cash and 2,382,077 shares of Activision common stock valued at approximately $30.0 million based upon prevailing market prices, and $39.0 million payable in Activision common stock within two years of the closing date, which is recorded in other liabilities."

Furthermore, Activision could end up paying even more under certain conditions. "...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," the SEC filing states.

With this in mind, if the upcoming Guitar Hero 2 performs very well, it's entirely possible that Activision will have paid $151 million in total when it's all said and done. Whether or not Activision overpaid is up for debate, but what publisher wouldn't want to have the Guitar Hero franchise in its portfolio right now?

Just some news I found on Game Revolution which may peek your interest.

[TheHakku]

edit: Wait nevermind. That didn't make sense.

[Amp Divorax]

Well, the quality of Red Octane DDR gear is now going to just keep going downhill most likely given the track record of Activision and EA.

[Izam]

Normally I'm an optimistic person trying to see the good in every situation, but this is surely going take a turn for the worst. While it is still possible that Activision will allow RedOctane's former employees to continue production on their own, the likely outcome is the obvious.

[Eight]

Activision sucks. I'm surprised they had $100M to spend. Okay, not that surprised, but they still suck.

/minorgamingrant

[lilchris25]

Ok, what's with all the posts saying that Activision sucks or something? From what I've read, they are only the second biggest video game publisher in the world.

[_bloop]

yea, and EA is first and yet they suck even more. They're too rich so they're lazy with their games. And the only reason they did this was for Guitar Hero.

[eepiccolo]

As long as Activision doesn't do something like try and micromanage Harmonix, hopefully things should be fine. Harmonix has done a great work with Guitar Hero.

[will-i-am]

This is totally bizzare. Guitar Hero should never have gave in, even if $100 million+ are right in reach of Red Octane. I would think that Red Octane, with the biggest of help from Harmonix, would realese Guitar Hero as a step up for the music gaming industry. Guitar Hero would be a music game to show that Red Octane's game is better than Konami's Guitar Freaks. But as it says, Red Octane is going to turn the ultimate table on what we were to think about the future of Guitar Hero.

[Kibo]

Does this mean RO won't be publishing ITG2 for consoles?