Activision Blizzard is known for their franchises such as the “World of Warcraft”, “Call of Duty” and “Guitar Hero”.
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Activision Blizzard said in the press release that the combined company will have a portfolio of “world-class interactive entertainment” franchises that are among the top performing.
Activision said it believes the addition of King’s business, which it called highly-complementary, will position it “as a global leader in interactive entertainment across mobile, console and PC platforms”.
King will operate with a few autonomy under the deal, with the current management team all locked in with long-term contracts.
The deal is expected to be completed by spring 2016 and will be subjected to approval by King’s shareholders and the Irish High Court, and clearances by antitrust authorities.
In other words, who cares if Candy Crush has already peaked? Most of us must have noticed those (not so) young women playing the game on their phone in the subway their entire ride.
Further to the news, shares in King jumped 15 per cent to close at $17.54 yesterday in New York, while Activision stock went up almost 4 per cent to $35.82. However, the company was slow to market with mobile games for smartphones and tablets.
One of the oldest names in video games plans to buy a company that has kept mobile users fingers busy for more than three years.
“Activision Blizzard will provide King with experience, support and investment to continue to build on their tremendous legacy and reach new potential”, says Bobby Kotick, Chief Executive Officer of Activision Blizzard.
The chore facing King of repeating the success of one of the trending games Candy Crush was a “daunting task” as said by Analysts from Jefferies.
Activision stated that purchasing King will broaden its reach with 60% of King’s players being female.
King was founded in 2003 as a gaming website; and, as per the latest statistics from tracking firm AppAnnie, it is presently the fourth ranking mobile game company by app revenue. King’s revenue dropped in the second quarter 16%. The move to buy the Candy Crush company will give Activision more than 500 million monthly active users. Studios such as Gamelab of “Diner Dash” and Dong Nguyen of “Flappy Birds” used to dominate the industry with the success of their respective games but soon faded after newer titles came out.
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Activision said it is using a few US$3.6 billion of offshore cash as well as a US$2.3 billion incremental term loan to pay for the purchase.
