Activision Blizzard is known for their franchises such as the “World of Warcraft”, “Call of Duty” and “Guitar Hero”.
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With this deal, Activision Blizzard is certainly looking to improve its mobile-gaming resources, but it’s also a bid to become a game maker with a more general audience.
Mobile gaming is a $36 billion market, Kotick said, and the purchase would “enhance our position as the most profitable interactive entertainment company in the world”.
“We will combine our expertise in mobile and free-to-play with Activision Blizzard’s world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide”.
King will operate with a few autonomy under the deal, with the current management team all locked in with long-term contracts.
As of this writing, it is expected that the acquisition will be completed by Spring 2016. Additionally, other makers of best-selling video games may just tell you how hard it is to come up with another hit after a world phenomenon. Launched in 2003, the violent, first-person shooter games generated $11 billion in sales through the end of the 2014 fiscal year.
These companies are veering away from the business of selling physical games as consumers are shifting from consoles to playing on smartphones and tablets. The company had a revenue growth of 20% in February 2015 for the full year, according to Telegraph.
King stock climbed 15 percent, or $2.31, to $17.85 Tuesday afternoon.
According to USA Today, the deal immediately boosts Activision’s stature on mobile devices, a market the company has struggled to capture. It’s also important to note that females account to about 60% of King Digital Entertaiment’s total players.
“Candy Crush” is a game so engrossing that it allegedly led a San Diego man to rupture a tendon in his thumb.
“They built an incredible business”, said Activision Blizzard CEO Robert Kotick during an interview.
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. Although the company has been trying to lessen its reliance on its most popular game, Candy Crush Saga, when it launched three years ago, it still makes about a third of their profits.
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Activision would fund the deal using cash and equivalents of $3.6 billion held outside the USA, and the remaining through an incremental debt from Goldman Sachs Bank and Bank of America Merrill Lynch.
