Episode 40: Activision Blizzard

**David Rosenthal** (0:04)
We're getting professional actors on here.

**Ben Gilbert** (0:06)
I know. The human torch was denied a bank loan. Welcome back to episode 40 of acquired, a podcast about technology acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:29)
I'm David Rosenthal.

**Ben Gilbert** (0:31)
And we are your hosts. Today we are covering the 2008 merger of Activision and Vivendi Games, the parent company of Blizzard Entertainment. We've got a pretty wild episode because these companies have had a crazy history.
It's got a lot of ins, a lot of outs, a lot of what have yous, and it's really been kind of a winding path. There's a lot of confusing names, so we will try and demystify the winding river that is Blizzard Activision.

**David Rosenthal** (0:58)
Yeah, yeah. I mean, you'd think that if you look at this, merger happened between these two huge game companies, Blizzard and Activision, and probably Blizzard was another public company, like Activision had a normal path there, you'd think, maybe IPO'd at some point. Nope. Turns out that they have been subsequently owned by the publishers of the Math Blaster software. Remember that, Ben?

**Ben Gilbert** (1:21)
Oh, yeah.

**David Rosenthal** (1:22)
Back in the day, the holding company that owned Ramada and Days Inn Hotels in the US, and then one of the French national water companies created by Napoleon III during the Second empire in France. We'll get into it on the show, but this is going to be fun.

**Ben Gilbert** (1:41)
Indeed. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (1:47)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners, and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose-built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (2:12)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (2:18)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (2:36)
Yep. Obviously, it's a huge benefit for the environment and for customers on costs since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay nvidia for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (2:52)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure who need to build their data centers close to major traffic hubs where the internet happens because they are doing everything in their clouds.

**Ben Gilbert** (3:09)
Yep. If you, your company or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired, that's crusoecloud.com/acquired, or click the link in the show notes. All right, David, you're ready to dive in?

**David Rosenthal** (3:29)
Well, let's do it as always. So we're going to tell the history of Blizzard, the Blizzard entertainment side of Activision Blizzard, mostly because we think there's kind of more interesting stuff both from tech themes going on in that regard and the story, as I alluded to earlier, is just crazy. Yet another example of you can't make this stuff up. So Blizzard was started initially as a company called Silicon & Synapse by three college friends from UCLA, right after they graduated in 1991
And they had all studied computer science together, Allen Adham, Frank Pearce and Mike Morhaime. And they love video games and they wanted to get into the scene. And they decided, hey, rather than working for someone else, this industry is young, let's start a company. And so they did. And they started out, at first, not actually making their own games, because they had just graduated from college, they didn't really know what they were doing. They started porting other people's games from platform to platform. So one of the big titles that they ported was Battle Chess. I kind of vaguely remember this. And they ported that version onto the Commodore 64 And that both let them make some money as a baby startup, but also got them experience with game development and they got kind of access to these code bases of what games look like. So they did that for a little while. And then in 1992, the next year, they sort of got some confidence in themselves and said, okay, it's time to make our own games. And so they did. I believe the first title they released was Rock & Roll Racing for the Super Nintendo. It came out in 1992, followed quickly by The Lost Vikings. And I remember these titles. And this is where Blizzard sort of really starts to develop its personality in these guys. Like, they are quirky dudes. And Rock & Roll Racing, I believe, was the first video game, at least the first console game, to feature, like, actual, you know, music, like licensed music in the game. And it was a racing game and had cars with, like, you know, lasers on them and rocket boosters and kind of like fun stuff. And then Lost Vikings, I think, I believe the plot of this was that three Vikings, like, from, you know, ancient Norse mythology get kidnapped by, like, an alien space pirate and they have to escape.