Earlier this month, we reported that Activision Blizzard parent Vivendi was set to make a move that might pay down its debt from the decision of Duty publisher’s coffers. The action would help pay down a small portion of significant debt.

As we mentioned in May, Activision has typically used a risk-averse investment profile. The publisher has largely stayed faraway from mobile, choosing instead to back a smaller collection of properties with growth potential.

This generation saw the upward thrust of Call of Duty because the biggest franchise in gaming, and the past three years had been enormous for the more youthful market (and their parents) with Toys for Bob’s Skylanders series. Licensed titles, including Transformers: War for Cybertron and Deadpool, fit the profile by using high fan interest.

Because of the more cautious approach, Activision has fared better within the recent industry disruption than many others, including its biggest rival, Electronic Arts. Activision most recently reported over $4 billion in cash, but a few of this is held outside the rustic. Were it to come contained in the Usa, the funds will be subject to taxes.

Activision doesn’t have the funds locally that Vivendi’s special dividend will require (approximately $3 billion, $2 billion of which might visit the parent firm). This may require new debt, a situation that Activision CEO Bobby Kotick have been working to circumvent. 

The Wall Street Journal report also mentions that Kotick was looking to use his company’s cash to purchase Vivendi out, though this have been disputed by other sources mentioned within the piece. 

We’ve reached out to Activision for comment.

[Source: Wall Street Journal]

Our Take
This probably goes without saying, however the situation isn’t good for Activision. A dividend would drain the corporate of a major amount of stockpiled cash meant to weather a tough 2013 fiscal year. 

Console transition years are hard, or even with Call of Duty: Ghosts coming, cross-generational development means added expenditure (even though solely developing for next-generation isn’t anticipated to extend costs).

If anyone can get over a sudden cash drain like this, it’s Bobby Kotick. He’s proven that during tough times, it’s possible to function a business without shedding a major variety of employees.

I expect that because of this we do not have a scheduled date for Activision’s second quarter earnings call. These presentations provide forward-looking guidance for investors. If Vivendi makes its move, it’d likely necessitate a drastic shift in planning and execution moving ahead.