Although Activision Blizzard beat analysts’ expectations on both the revenue and EPS front, its revenues of $1.04 billion fell by 11% on a YoY (year-over-year) basis in 3Q15.
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The company’s gross bookings, or payments made in its free-to-play games, slid year-on-year – down 8 percent, to $502 million, from $544 million for the same period a year ago. King is expected to continue operating separately alongside Activision Blizzard as per terms to be agreed and finalised, while the conglomerate will benefit from the continuing popularity of the brand and game.
Activision Blizzard Inc.s plan to buy the Dublin-based maker of Candy Crush Saga for $5.9 billion not only gives it access to the fast-growing mobile gaming industry, it will help save taxes. The company considers “Candy Crush” as profitable and it’s gradually being overcrowded.
Activision Blizzard Inc., based in Santa Monica, California, will pay $18 in cash for each King share, a 20 percent premium over its Friday closing price.
King is publicly traded on the New York Stock Exchange but the company has not yet created a hit to surpass the 2012-launched “Candy Crush Saga”, prompting skepticism on Wall Street that the company can stay competitive. It started off with one studio, but the need for expansion led the company to expand to 12 different locations. The sudden interest to pursue an acquisition in the mobile game market could have been fueled by Blizzard’s Hearthstone, which has attracted more than 25 million players. The company announced its financial results for the third quarter a day earlier than anticipated.
Adjusted revenues for the quarter decreased 2.3% year over year to $502 million but surpassed the Zacks Consensus Estimate of $479 million. Both numbers exceeded analysts estimates.
Company shares opened the most recent trading session at 37.450 and at the time of writing the last Bid was at 37.335.
Moodys Investors Service upgraded Activisions credit rating to investment grade.
Marrying the continuing success of the MMORPG with Activision’s dominating Call of Duty franchise available across PS4, PC and Xbox One was already a shrewd move – and bringing the mobile expertise of King and the empire behind Candy Crush Saga may have brought together a holy trinity of mobile gaming. It had a market value of $4.9 billion as of Monday, according to data compiled by Bloomberg. The company’s strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity.
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-With assistance from Stefan Nicola in Berlin.
