Video game giant Activision Blizzard announced Monday night an agreement to buy mobile gaming company King Digital Entertainment for $5.9 billion.
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According to Gamesindustry.biz there are still various legal obstacles to cross before the acquisition is approved, but the deal should be completed by Spring 2016. “In order to play games, you had to pay $300 for a console, or even more for a PC”, Bobby Kotick, Activision Blizzard’s chief executive, said in an interview. The puzzle games involve matching virtual sweets on a jumbled grid to score points.
King Digital Entertainment, the maker of “Candy Crush” has a market capital of under $5 billion. At 450 million monthly active users in 196 countries, King’s audience is just what Activision needs. More than 1.4 billion games are played on a daily basis. And who knows, Candy Crush Players (Candy Crushers?) might see a few Activision IP pop up in future game updates. The company’s other games include Bubble Witch Saga and Pet Rescue Saga.
In oil trading, benchmark UScrude added $1.97, or 4.3%, to $48.11 a barrel on the New York Mercantile Exchange. Its stock, which priced at $22.50 in the IPO debut 2014, trades at $15.54. King Digital also spent time seeking to replicate its “Candy Crush” success in other games. Apax Partners, a private equity firm with 45 percent investment in King, will also receive payment as part of the acquisition. They may never touch a PlayStation 4, but they still spend millions of dollars a day on colorful goodies and extra content within a game – making mobile gaming one of modern entertainment’s fastest-growing moneymakers. Revenue from subscriptions, downloadable content, and the like amounted to a record $697 million after adjusting for certain charges and currency effects.
As a result, ATVI will increase its revenue by 30%, drive its profit 60% higher, and is getting this for less than nine times earnings minus cash. “We love the idea of being able to reach an entirely new audience”, he says. “We love the idea of adding millions of females to our audience”. However, Activision says they are banking on their previous luck and experience in keeping running big game hit franchises such as “Call of Duty” and “World of Warcraft” to aid them in developing new popular hit games. We are very much looking forward to working with Activision Blizzard.
“Our understanding is that KING has a particularly sophisticated analytics system in place to analyze player data, customer acquisition, monetization, etc…”
Combined, the two companies have generated $6.8 billion in non-GAAP revenues over the trailing 12 months.
Activision was founded in October 1979 by former Atari developers and employees, becoming the first ever third-party video game company.
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Previously, Destiny was at 20 million players as of May 2015, and at 17 million players as of March 2015.
