Vivendi 'may sell video game unit'

PARIS, France -- Vivendi Universal, the world's second-largest media group, is considering selling its U.S.-based video game software business in a deal worth as much as 2 billion euros ($1.96 billion), according to a report.

Vivendi's (PEX) new chief executive, Jean-Rene Fourtou, has not made a formal decision yet over selling the video game business and was still weighing other options, the Wall Street Journal said on Wednesday. But Fourtou has identified the business as non-core and expendable.

The company, which is under new management and needs to slash its debt mountain of 19 billion euros, is leaning away from a sale of its 44 percent stake in telecoms company Cegetel, the paper said.

Vivendi's stake in France's second largest mobile telecoms operator Cegetel is valued by analysts at 5 billion to 7 billion euros. British mobile phone company Vodafone Group (VOD) has said it would be interested in buying Cegetel.

But Fourtou does not want to sell at fire-sale prices and may wait until telecom valuations recover.

Vivendi's video game business, known as Vivendi Universal Games, is the world's second-largest maker of games for personal computers and operates the world's biggest free online gaming site on the Internet.

Potential buyers include Microsoft, Sega and Sony, the paper said.

Former Vivendi chairman and chief executive Jean-Marie Messier considered the business a core part of the media empire. The business is made up of three games houses -- Blizzard Entertainment, Sierra Entertainment and Universal Interactive -- that together have an annual revenue of $600 million.

Vivendi would prefer to sell them as one unit, the paper said.