Vivendi Games, soon to merge with Activision and become the goliath Activision Blizzard, saw its sales fall 24% from Q1 last year, thanks to the lack of a World of Warcraft expansion. The percentage may be down, but the money still flows like an Azerothian river, with Blizzard contributing €192 million of Vivendi's €221 million in sales this quarter. Vivendi also announced that WoW added another 700,000 players and the Sierra divisions performed "slightly higher" than last year.

With Vivendi expecting the next WoW expansion, Wrath of the Lich King, sometime later in 2008, we'll plan on a Naaru size jolt to Activision Blizzard's cash flow at that time. For now, Vivendi will just have to enjoy the disgusting amounts of cash it gets from WoW, instead of the nauseating amounts Activision Blizzard will make from the WotLK release.

Following up on a rumor posted on Kotaku, we've just learned that Activision and Vivendi Games has discontinued its membership with the Entertainment Software Association. This information comes in the wake of yesterday's announcement that Activision and Vivendi would not attend E3 this year.

The ESA's Rich Taylor, senior VP of communications and research (full quote after the break) says, "We can confirm that Activision and Vivendi Games opted to discontinue their membership. The ESA remains dedicated to advancing our industry’s objectives such as protecting intellectual property, preserving First Amendment rights, and fostering a beneficial environment for the entire industry."

A proxy statement filed with the Securities and Exchange Commission tells the tale of how the Activision Blizzard merger almost didn't happen. GameDaily sifted through the massive document to discover that discussions about the possible merger go back to November of 2006, with things really heating up going into last summer. After little progress on transaction terms, Jean-Bernard Lévy, CEO of Vivendi, called up Activision head Bobby Kotick in June to say that he "did not think it made sense to continue discussions concerning a possible transaction at that time."

Around July, Kotick contacted Lévy with Activision's new proposal. The lawyers went to work and sometime around September, with "little progress on open issues," Kotick called the deal off. Strangely, Blizzard's Mike Morhaime and other Blizzard managers (who were under the Vivendi umbrella at the time) stepped up and got things back on track with a management structure proposal. By November the Activision Blizzard deal was final and the industry got another 800 lb. gorilla to keep EA company.

Following yesterday's big Activision Blizzard news, executives from Activision and Vivendi Games held an 8:30am conference call explaining the merger, the product of over a year of discussion between the two companies.

There are a few major takeaway points from the conference call, most of which involve Blizzard. Those worried that the merger could affect Blizzard's sterling reputation for quality -- and those still unconvinced despite Blizzard's FAQ on the topic yesterday -- will be pleased to know the company will operate as its own entity. The deference paid to Blizzard's properties throughout the call -- not to mention the new comapany's name itself -- serves as a testament to the value of Blizzard in the arrangement.

Will Blizzard make World of Warcraft for consoles? "There are no plans to release anything on the console side. Blizzard's focus is on the PC side. If we were to release anything on the console side, that would be managed by the Blizzard side of the business. At some point in the future, if it made sense to talk to the Activision side of the business about that, we would certainly do so. At this point, there are no plans to release any of the Blizzard franchises on the consoles," says Blizzard boss Mike Morhaime.