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.
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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replyOzzie Mejia posted a new article, Activision Blizzard acquires Candy Crush Saga publisher King Digital Entertainment for $5.9B
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Did not see this one coming.
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That's a weird purchase.
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It's been becoming steadily less popular, but still pulls in way too much cash.
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That's almost three Oculuses.
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or two giant ships from Star Citizen.
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Y U NO BUY SHACKNEWS FOR STUPID AMOUNT OF MONEY, ATVI?
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Woo hoo!
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of Duty
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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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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-
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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Couldn't blizzard but do that without them though? Or do you need the minds behind candy crush?
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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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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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Question out of total ignorance: How different are the two games?
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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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I guess that's one way to waste $5.9B.
But really, the two belong together.-
$5.9B is only a week of WoW subscription moneys.
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I think they already said it will be.
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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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not going to get almost 6 billion from that.
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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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Stupid. This is Zynga level overvaluation all over again.
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They are way more profitable than I thought. Their P/E is 10, which is quite healthy. I don't know about their forward outlook, but they have quite a bit of cash and solid margins.
http://finance.yahoo.com/q/ks?s=KING+Key+Statistics
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pesos, obviously.
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