Blizzard Entertainment Corp. in Irvine did more than help online gamers battle each other last year.
“World of Warcraft,” a game where millions of players face off over the Internet, played a part in a strong 2005 for parent Vivendi Universal SA of Paris.
Vivendi recently reported adjusted net earnings of $2.6 billion in 2005, up 55% from 2004. The company also said it planned to boost its dividend.
“World of Warcraft” delivered “exceptional results” to the company and its games unit, according to Vivendi.
The games unit went from a $251 million loss (including a one-time charge of $113 million) in 2004 to profits of $51 million in 2005.
Vivendi’s games unit saw a big spike in sales last year, up 35% to about $800 million.
For the uninitiated, “World of Warcraft” is a role-playing game where players take on the part of a unique character who goes on adventures, completes quests, acquires wealth, sleeps, fights and dies.
“World of Warcraft” is a big reason why Blizzard has grown into Orange County’s second largest software company by local employment, after Costa Mesa business software maker FileNet Corp.
The company recently cleared the 6 million-user mark for “World of Warcraft” and has plans to launch a Spanish version.
McGregor’s Payday
Scott McGregor did well in 2005.
With his base salary, stock awards and other compensation, McGregor, chief executive of Irvine-based chipmaker Broadcom Corp., pulled in nearly $8 million in 2005.
That’s not bad compared to Alan Ross, who was succeeded by McGregor in early 2005. Ross pulled in nearly $4 million in total compensation during 2004.
Most of McGregor’s compensation came from stock awards.
Early last year, McGregor landed 300,000 “restricted stock units,” which were worth about $6.4 million at the time.
By the end of last year, more than 200,000 of those units remained unvested and,because of the rise in the stock price,were worth nearly $7 million.
McGregor also received a $600,000 salary and a $431,425 bonus.
Travel costs related to moving here from Europe were more than $260,000. That included $155,921 paid to McGregor for relocation expenses and $108,081 of tax reimbursement for income “realized” from the payment of the relocation expenses.
McGregor formerly headed Philips Semiconductors, a unit of Netherlands-based Royal Philips Electronics NV.
Of course, 2005 was a big year for Broadcom.
The company saw a shift to the faster-growing consumer market from its traditional business customers. Contract wins included a key chip for the video iPod.
During the year, the company posted adjusted earnings of $548.6 million, up 22% from 2004. Revenue jumped 11% to $2.7 billion.
Investors pushed the stock up more than 50% and to levels not seen since 2001. The company now boasts a market value of about $24 billion.
Telco TV
A bill in Sacramento could streamline the process for telecommunications companies trying to offer TV channels.
AB 2987 aims to make it easier for companies such as AT & T; Inc. and Verizon Communications Inc. to get franchise rights to offer what’s called IPTV, or Internet protocol television, in California cities.
Until now, Verizon has sought to get franchise rights city by city, just like the cable companies did decades ago. The franchise pacts often require revenue sharing and emergency broadcast warnings.
But getting franchise deals is a long process and puts off choices for consumers, the telcos say.
The bill could shift negotiations to the state level.
“Essentially what it would do is allow us to get a state-issued franchise instead of going community by community,” said Jon Davies, a Verizon spokesman. “It would still maintain the franchise fees of the local community, but it would allow us to speed up the process.”
Davies pointed out that in two years of trying to get franchise agreements, Verizon has landed just four in the state.
AT & T; and Verizon are taking somewhat different approaches to the issue.
The network Verizon has chosen for IPTV service requires franchise pacts. AT & T;’s doesn’t, telcos said.
Gordon Diamond, spokesman for AT & T;, said the bill sounded “encouraging” but wanted to see what kind of legislation develops.
AT & T; isn’t seeking full franchise agreements with each city, he said.
Instead, AT & T; is trying to make simpler contract agreements, like the one recently signed in Anaheim. The pacts still give local cities a piece of the revenue and provide emergency warnings.
“In our discussions with cities, we are willing to pay off up to the federal maximum of 5% to keep those revenue streams intact,” Diamond said.
If it didn’t get these kinds of agreements, the process would take years, Diamond said. In fact, if AT & T; were to get approvals at each city in California every week, it would take seven years to get its full coverage area approved for IPTV.
The companies also are trying to streamline rules at the federal level, Diamond said.
