Activision Blizzard acquires Candy Crush Saga publisher King Digital Entertainment for $5.9B

Days ahead of Blizzcon, Activision Blizzard has dropped a bombshell by acquiring the publisher of one of the world's most lucrative mobile gaming properties.

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Just days ahead of Blizzcon 2015, it appears that Activision Blizzard has been busy and is ready to drop a bombshell. News has come out this evening that the publisher is acquiring Candy Crush Saga publisher King Digital Entertainment for $5.9 billion.

The acquisition give Activision Blizzard quite the stronghold in the mobile gaming market. In fact, the issued press statement notes the acquisition as part of a new global strategy to reach out to the lucrative mobile gaming sector and further diversify Activision Blizzard's intellectual properties that include Call of Duty, Destiny, World of Warcraft, Heroes of the Storm, Starcraft, Guitar Hero, and many more. The deal will be in cash that will be come out of the publisher's available offshore funds, as well as from a $2.3B loan that it will take out from Bank of America, Merrill Lynch, and Goldman Sachs.

Activision Blizzard is also expressing this as an opportunity to potentially cross-promote and grow a number of its franchises through the mobile gaming sector. The acquisition is subject to approval by King's shareholders, but the move has already been met with enthusiasm and is expected to be completed by Spring 2016.

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Ozzie has been playing video games since picking up his first NES controller at age 5. He has been into games ever since, only briefly stepping away during his college years. But he was pulled back in after spending years in QA circles for both THQ and Activision, mostly spending time helping to push forward the Guitar Hero series at its peak. Ozzie has become a big fan of platformers, puzzle games, shooters, and RPGs, just to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can't enjoy a good story with a fresh Cherry Coke?

From The Chatty
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      November 2, 2015 8:02 PM

      Huh.

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      November 2, 2015 8:03 PM

      Hmm.

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      November 2, 2015 8:04 PM

      That's a weird purchase.

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      November 2, 2015 8:04 PM

      Is Candy Crush still mega popular? I figured that cash cow had come and gone by now

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        November 2, 2015 8:20 PM

        last year they had 149 million daily active users

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          November 3, 2015 12:13 AM

          1 in 50 people? on earth??

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        November 2, 2015 9:44 PM

        They bought Z2Live in the building I work at. Really nice floor.

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        November 2, 2015 11:21 PM

        It's been becoming steadily less popular, but still pulls in way too much cash.

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      November 2, 2015 8:05 PM

      Whoa.

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      November 2, 2015 8:06 PM

      Hopefully not with the intention of improving the monetization of Blizzard's free-to-play offerings.

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      November 2, 2015 8:06 PM

      Pretty sure $5.9B is about as much as I've spent on Hearthstone as well so you're welcome Blizzard

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      November 2, 2015 8:24 PM

      Y U NO BUY SHACKNEWS FOR STUPID AMOUNT OF MONEY, ATVI?

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      November 2, 2015 8:38 PM

      World of Hearth Candy Stone Crush

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      November 2, 2015 8:38 PM

      reeks of the Draw Something acquisition and Rovio/Zynga's failure (more so Rovio). Obviously Candy Crush is much bigger and sustained longer but still no proof of future success.

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        November 2, 2015 9:25 PM

        I don't think "proof of future success" is something that exists with any acquisition. King Digital's revenue stream and growth must be super strong to command that price.

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          November 2, 2015 11:01 PM

          there are plenty of technology companies you could buy with a reasonable understanding of what their future looks like. They have business models where a product or service continues to expand and create a virtuous cycle or has/gains network effects, etc. Obviously nothing is guaranteed but you're not living in a world where succes 3-5 years from now is completely divorced from today's success. In the media business there's little predictive capability provided by someone creating 1-2 good games/movies/albums/etc. At some point you do it enough to generate a trustworthy future but this isn't that.

          While the developer scored big with Candy Crush, it has struggled to create a successor to that blockbuster. King Digital’s adjusted revenue has fallen in each of the past four quarters while gross bookings, another measure of online sales, dropped 13 percent to $529 million in the second quarter.

          http://www.bloomberg.com/news/articles/2015-11-03/activision-to-buy-king-digital-in-5-9-billion-games-merger

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            November 2, 2015 11:29 PM

            If you see this transaction as Blizzard trying to get on the King Digital train that will continue on the same course it was on prior to the acquisition, then yeah, it looks like a dumb move. But if there is a company that knows how to put out a successful sequel and continue to iterate, it's Blizzard. If they throw their experience behind helping to develop a successor to Candy Crush, whatever that is, they could have something extremely valuable.

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              November 2, 2015 11:44 PM

              That's actually a fantastic way of looking at this.

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              November 3, 2015 1:01 PM

              Couldn't blizzard but do that without them though? Or do you need the minds behind candy crush?

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                November 3, 2015 1:37 PM

                You would have to consider the investment required to spin up a new team to build a new type of product for a different kind of user. And there is no guarantee it would be successful. Hearthstone is Blizzard's first foray into mobile free to play, but it still fits with Blizzard's brand and user base. Candy Crush is soooo much more broad and casual.

                They are spending a lot more to acquire King Digital, but it comes with a guaranteed revenue/profit stream along with a whole staff of mobile devs who know how to wring money out of this type of game and business model.

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        November 3, 2015 12:26 AM

        Yup, Activision just wanted a piece of the mobile pie and had money hats to spare from CoD. Mobile gamers are fickle and Candy Crush just seems like another huge one hit wonder. Name another game they've made.

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      November 2, 2015 9:28 PM

      I downloaded Candy Crush, but I don't like the graphics so I stopped playing it. That little girl is creepy. I prefer Farm Heroes Saga because the cropsies are cute!

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        November 2, 2015 9:29 PM

        Question out of total ignorance: How different are the two games?

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          November 2, 2015 9:57 PM

          Candy Crush = candy pieces

          Farm Hero Saga = cute veggies with faces

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            November 3, 2015 12:27 AM

            Innovation right there!

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          November 3, 2015 8:18 AM

          Candy Crush is similar to Bejeweled: you match like items in combinations of 3, 4, 5+. The more "candies" you match in a single move, or the formation in which you match them, generates special candies with explosive powers. You have goals, like remove x number of y to move on to the next level. It is not timed. You have a limited number of moves to make your goal. As soon as you make your goal, the level stops and you move on to the next one.

          Farm Heroes Saga shares the match 3/4/5+ principle, but there's an interesting game strategy that differs from CC. Matching combinations do not yield special items, but creating a match will usually cause the immediately adjacent items to gain value. Special matching combinations affect more than just the adjacent items. The special gains disappear after you make your next move. But if a move kicks off a cascade of matches then the special gains stack and your next match could be valued much higher than 3/4/5. When you reach your goal of removing x amount of y from the board, gains continue stacking without being discharged (up to 9) and you shoot for the high points. After every successful round, depending on the points, you get awarded a number of magic beans you can use to buy boosts for the next level.

          The graphics in FHS are definitely my favorite (I always mute my gameplay, so no comment on music and sound fx). The in-game animations are fun and the gameboard changes with the different levels to add difficulty and force you to adjust your strategy. As you work your way through the levels, special gameboard items are introduced, too, like flowers that bloom, and rockets that launch, and dinosaur eggs that hatch, but only when you create matches next to them. These devices keep things interesting (for me, anyway).

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      November 2, 2015 9:36 PM

      holy crap?!

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      November 2, 2015 10:20 PM

      I guess that's one way to waste $5.9B.

      But really, the two belong together.

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        November 3, 2015 1:50 PM

        $5.9B is only a week of WoW subscription moneys.

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      November 3, 2015 12:16 AM

      $100 says overwatch is f2p

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        November 3, 2015 12:28 AM

        Nobody will take the other side on that bet.

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        November 3, 2015 6:41 AM

        I think they already said it will be.

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      November 3, 2015 12:28 AM

      Does that mean that Candy Crush is more popular than Star wars?

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        November 3, 2015 12:43 AM

        it's coming up to Jesus territory

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        November 3, 2015 3:04 AM

        No it means this deal is hilariously overvalued. They also talk about extending other Activision properties to mobile - yes, because a company that made a match 3 puzzler is perfectly placed to bring Destiny and Call of Duty to mobile. Candy Crush but with grenade and rifle icons!

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          November 3, 2015 3:42 AM

          It worked for Angry Birds!!!!

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            November 3, 2015 7:59 AM

            Oh that company that insisted it was going to be the next Disney? Yeah, how's that second major franchise coming along Rovio?

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          November 3, 2015 8:21 AM

          I would play candy crush with grenade and rifle icons.

          Or Warcraft sword and axe icons.

          Especially if it unlocked any sort of cosmetic item in the 'real' games.

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      November 3, 2015 12:50 AM

      Is the deal really final? News sites say ActiBlizz made a bid.

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      November 3, 2015 2:03 AM

      WTF. Why?

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        November 3, 2015 3:16 AM

        Activisions profit was 1.1B, King's was 0.6B. So it's a very profitable company.

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      November 3, 2015 4:40 AM

      All they do is copy other games. Couldn't Activision higher a mobile team that does the same thing for far less than $5.9 billion? I'm not trying to slag King but from a business perspective, these mobile companies rarely have a second hit.

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        November 3, 2015 7:31 AM

        Brand recognition and userbase.

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          November 3, 2015 7:42 AM

          not going to get almost 6 billion from that.

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            November 3, 2015 7:53 AM

            Maybe, maybe not. It strikes me as similar to the Disney acquisition of Lucasfilm and Marvel: it's about buying market presence.

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          November 3, 2015 7:46 AM

          There is reason to believe that brand recognition and userbase are largely meaningless in the mobile space.

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      November 3, 2015 7:40 AM

      Call of Candy: Modern Saga III: Crush Ops

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      November 3, 2015 8:22 AM

      Can't wait for that cute little Candy Crush heroine to be in Heroes of the Storm. I wonder what powers she will have?

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        November 3, 2015 11:14 AM

        She drains all the money out of opposing heroes

        Ranged support with tons of CC.

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      November 3, 2015 11:25 AM

      Stupid. This is Zynga level overvaluation all over again.

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      November 3, 2015 11:52 AM

      what the hell

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      November 3, 2015 12:32 PM

      from reddit: candy crush made on average 3.6 million a day in 2014. so far in 2015 they make on average 6 million a day.

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        November 3, 2015 12:33 PM

        DOLLARS?!?!?!?!?!!?!?!

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        November 3, 2015 12:50 PM

        And people are laughing at this valuation. $6 million per day puts you at a run rate of $2.1b per year.

        That's Pablo Escobar money. Damn.

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