Game publishing titan Activision Blizzard has purchased mobile gaming titan King Digital Entertainment for US$5.9 billion.
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SYDELL: Clearly Kotick was paying enough attention to make the case to his board that purchasing mobile game maker King Digital for $5.9 billion was a good idea.
The deal, which is subject to approval of King’s shareholders and regulators, is expected to close by springtime. “Activision Blizzard believes that King provides it with key capabilities in mobile gaming that will help Activision Blizzard to execute its strategy and further position it as a leading interactive entertainment company across key platforms”.
In a statement by Activision Blizzard CEO Bobby Kotick, per TIME, the executive explained that the company’s recent move is to solidify the company’s position as the leading business in the gaming industry. California-based Activision has a few of the best-known video game titles on the market, including “World of Warcraft”, “Diablo”, “Guitar Hero”, “Skylander” and most recently “Destiny”.
The combined company will have a portfolio of a few of the top-performing game franchises, including two of the five highest-grossing mobile games in the USA (Candy Crush Saga®, Candy Crush Soda Saga™), the most successful console game franchise (Call of Duty®), and the largest personal computing franchise (World of Warcraft®). With Candy Crush, every month, King Digital gets over 450 million active users from 196 countries.
The deal also gives the U.S. company a major presence in the mobile market, where games sales are expected to grow 21 per cent in 2015 to $US20.6 billion, according to research firm Newzoo. And Activision’s press release points out all of that, of course.
With a value of around $22.50 per share during an initial public offering in 2014, King will reportedly be sold at a discount price of $18 per share.
The game is already plagued with bugs and complaints, where accidental purchases are made with the unconfirmed click of a button and draining user’s wallets, and this new development could cause many more bugs. Activision plans to let King be run as an independent company, which seems like the most reasonable thing to do. I’ve come to think of Candy Crush as one of those things everyone can agree on.
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The stock had fallen after the IPO on concerns that the company [King Digital] may fail to diversify from its top-selling game and become just a one-hit wonder.
