Activision-Vivendi merger will shake gaming biz

This will force other companies to also approach MMO more aggressively and try to move into other emerging streams and global distribution, he said.

"I don't see a 'deal wave' coming" right now," said Michael Pachter, analyst at Wedbush Morgan Securities. But he and others also expect a focus of game companies on increased global reach and profitability amid ever-rising development costs that drag down profit margins.

Along with outright acquisitions, this could lead to partnerships or significant investments, which could increasingly bring together companies focused on different regions of the world and different gaming platforms, analysts say. Some even see an increased possibility for media companies folding their gaming business into a public game firm and taking a stake in the merged entity.

For now, though, Sterne, Agee & Leach analyst Arvind Bhatia said Activision Blizzard will have the highest margins in the industry by far. "There is potential for the combined entity to reach 30%-plus operating margins," compared with the more common operating margins in the 10%-20% range, he said.

Meanwhile, EA -- known among other things for its "Madden NFL" series -- has been trying to strike its own deal. While it wouldn't significantly build its MMO and global reach, a takeover of Take-Two Interactive could add the hit franchise "Grand Theft Auto" to EA's arsenal.

While various analysts like shares of EA and the new Activision Blizzard for their scale and potential bottom-line improvements, Ernst is most bullish on a foreign player: Nintendo. He said the Wii console is starting to really be "a significant driver" of earnings this year, and Nintendo also should continue to benefit from a sales shift away from the Sony's PlayStation and Microsoft's Xbox.

Reuters/Hollywood Reporter