Activision to Expand Game Lineup With Raven Purchase


In a move aimed at boosting itself into the top tier of computer game makers, Activision Inc. will announce today that it will buy game developer Raven Software for nearly $12 million in stock.

Activision, a developer and publisher of games ranging from Zork Grand Inquisitor to Earthworm Jim, is seeking to expand its lineup of games for CD-ROMs and the Sony, Sega and Nintendo platforms. In recent weeks, the Santa Monica-based company has reorganized the ranks of its top executives to position itself for a string of acquisitions.

The Raven deal marks Activision’s first purchase of a game developer. Bobby Kotick, Activision chairman and chief executive, said more deals will be forthcoming but that he could not predict how many.

“We’re moving away from the entrepreneurial phase to the institutionalized, strategic phase,” Kotick said Wednesday. “We believe that in order to be a profitable institutionalized video game company, you probably need to [have annual revenue] between $200 million and $300 million.”

Activision, which reported $86.5 million in sales last year, expects to pass the $200-million mark in the next few years, Kotick said.


Raven is an attractive buy for Activision because two of the company’s games, Heretic and Hexen, are well-known franchises, Kotick said. Hexen II will be released by Activision next month as part of a preexisting agreement.

No layoffs are expected at Raven, a 7-year-old firm in Madison, Wis., that employs 47 people.

“We knew we needed to find a strategic partner to take the company to the next level,” said Brian Raffel, who founded Raven with his brother Steve. “We looked at a lot of different partners and Activision was the best fit.”

Activision also plans to grow by stepping up internal production, buying individual titles from other developers and boosting international publishing, Kotick said.

When the deal is completed at the end of the month, Raven will become a wholly owned subsidiary of Activision and will remain in Wisconsin.

Activision will pay for Raven with 1.04 million shares of its stock, which closed Wednesday at $11.50 in Nasdaq trading, down 37.5 cents.