Reacting to the astounding move by Vivendi to merge with giant game publisher Activision, Take-Two Interactive CEO Ben Feder said that such moves are inevitable in the industry judging by how things are going.

"Video-game development is not getting any cheaper," explains Feder. "It's a capital-intensive business, and I don't see that going away. That will drive some of the smaller competitors out.."

With the introduction of high-definition graphics, online functionality and other next-generation features in today's games, costs of production have shot up exponentially. Budgets for the production of a good-quality title are thought to hit some US$ 30 million or more in some cases.

Merging should make smaller video game outfits more stable and competitive in the US$ 40 billion industry. Pundits say that the unification of Activision and Vivendi may herald a new age in the gaming business.