The deal is one of the largest ever seen in recent years, even topping Microsoft’s $2.5 billion deal to buy Mojang, the developer of hit video game “Minecraft”.
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A few critics have said that the real question is if the company is going to be able to expand their network through the creation of new games since Kings’ current success is heavily founded on the Candy Crush franchise. However, that game is nowhere in the ballpark of the Candy Crush player base; King Digital claimed 474 million monthly active users in Q3 2015. Mobile gaming is forecast to bring in $30.3 billion in 2015, beating console games for the first time, according to Newzoo, a market research firm.
“The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment”, said Kotick.
Activision shares were up 1.5 per cent at US$35.09 in early trade Tuesday, while King shares jumped 14.0 per cent to US$17.72. Activision thinks that the acquisition will give them an advantage in PC, mobile and console gaming and helps them grow in the future. Not to mention its colossal properties such as World of Warcraft and Starcraft when the company merged with another major player in the gaming industry nearly eight years ago. Analysts predict that investors weren’t expecting a higher bid than of Activision Blizzard’s, Guardian reported. In short, Activision, with its hands on Candy Crush, Call of Duty, Destiny, Guitar Hero, Skylanders, World of Warcraft, etc., stands to become a “global leader” across the spectrum of interactive entertainment.
Activision would fund the deal using cash and equivalents of $3.6 billion held outside the U.S., and the remaining through an incremental debt from Goldman Sachs Bank and Bank of America Merrill Lynch.
“Candy Crush Saga” creator King Digital Entertainment has just been sold to Activision Blizzard. This deal completely turns things around.
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Dublin-based King will continue to operate as an independent operating unit led by chief executive Riccardo Zacconi. Another $2.03 Billion will be loaned to Activision from Bank of America.
