Candy Crush maker King Digital bought by Activision Blizzard

[QualityChimp]

http://www.bbc.co.uk/news/business-34707701

"US computer game company Activision Blizzard, which produces World of Warcraft and Call of Duty, is buying King Digital Entertainment, the creator of Candy Crush.

The deal is worth $5.9bn (?3.8bn).


Activision said in a statement the acquisition would make it a global leader in interactive entertainment across mobile, console and PC platforms.


The Call of Duty series is one of the world's best selling console games.
Candy Crush is among the most popular games on mobile devices.


Video game publishers are switching from the physical sale of games to digital growth as consumers move from consoles to playing on smartphones and tablets.


Activision Blizzard's chief executive Bobby Kotick told the Reuters news agency that the company wanted to broaden its reach and appeal to a larger demographic.


He said that 60% of King Digital Entertainment's players were female, and that no games console or hardware, besides a smartphone, was needed to access its games."

"I can categorically state the new World of Warcraft and Call of Duty games will be mobile-exclusive match-three free-to-play games and our focus, moving forward, will be this platform" an insider exclusively revealed to nobody because I just made it up.

[VR46]

This Eurogamer post cracked me up

"Xx_3L1T3SN1PER_xX sent you a request to play Candy Crush"

[Asura]

This is a surprise; I'm shocked Activision could afford them. King are like a licence to print money.

That being said, from a strategic point-of-view it makes sense. Back when Ubi/EA/Squeenix etc. were getting into the mobile space 4 or so years ago, Activision made a big song-and-dance about how they were "totally focused" on console/PC gaming and weren't interested in diversifying - then the figures came back from the early successes and they tried, but never really managed to get much traction.

Now, obviously, they've decided the least risky way is to simply BUY into the space.

Personally though I think they'll need to tread carefully. The last time this happened, it was EA buying Playfish, and that turned out to be a complete waste of money:

http://techcrunch.com/2009/11/09/not-playing-around-electronic-arts-buys-playfish-for-275-million/

http://www.gamesindustry.biz/articles/2013-04-15-ea-shutting-down-playfish-games

The numbers were an order of magnitude less, but suffice to say EA bought Playfish for 300 million in 2009, then closed them several years later without much to show for it.

Part of the reason why is that these mobile startups tend to have joint ownership with their staff, so if a big company buy you out, as a regular staffer you might get a windfall of ?20k (maybe a lot more for senior staffers) and companies like King can't really get bigger (like Zynga, the only way from the top is down). F2P gaming is very fickle so once this happens staff leave in droves.

Activision belong to the "old industry", which still has the mistaken belief that the value of a company is in its IP, whereas the true value of a company is in its staff. Again, this is why Zynga are gradually falling apart.

I'll be interested to see, by 2020, if this has paid off for them. I'm going to say now that I don't think it will. This is another example of money-men trying to run a games industry business like a regular business ("powerful company + powerful company = profit") whereas we've seen time-and-time-again that this is not the case.