That is… quite a lot of money. $1.9 billion more than Disney paid for Star Wars. $3.4 billion more than Microsoft paid for Minecraft. $3.9 billion more than Facebook paid for Oculus. $5.15 billion more than EA paid for PopCap. Hell, even if you just succumb to temptation and round the $5.9 billion (or approximately £3.8 billion/€5.4 billion) Activision Blizzard just paid to acquire King.com up to $6 billion, that’s 100 million dollars you’re flinging about the place like it ain’t no thang. Quite a lot of money. And for what?
Well, for a company which makes free-to-play match-3 puzzle games that are played by a helluvalot of people on Facebook and mobile (and there are PC versions for Candy Crush Saga too, naturally).
The reason the company which owns Call of Duty, Destiny, Warcraft, StarCraft, Skylanders et al just brokered one of the biggest deals in history is because, for all its games industry dominance, it doesn’t have much of a foothold in mobile, with all its free-to-play/microtransacted low-hanging fruit. Picking up King.com essentially puts its somewhere near the very top of the App Store hierarchy.
“Activision Blizzard believes that the addition of King’s highly-complementary business will position Activision Blizzard as a global leader in interactive entertainment across mobile, console and PC platforms, and positions the company for future growth,” read a sentence parsed through approximately 28 stern people in expensive suits before release this morning.
Even so, many have felt that King.com was a one-trick pony (even if said pony was astonishingly lucrative), and doomed to see the same bubble-burst shareprice apocalypse as one time social game titan Zynga. For reference, King.com’s total 2014 revenue was $2.4 billion, 20% up on the previous year, although ‘only’ $661 million of that translated into profits.
So it’d take Activision several years to earn all their money back if King’s takings stayed exactly as they were – but who knows what pairing Activision’s existing mega-brands with Candy Crush’s name, ethos or customer base could achieve. Equally, the whole boat could sink as customers lost interest in That Sort Of Thing, as was the case with FarmVille.
But while King has certainly had its wobbles (both shareprice-wise and being utter rotters-wise), by this point it’s arguably demonstrated more staying power than Zynga did – perhaps partially because mobile is a more evergreen platform than Facebook games were. Both Candy Crush Saga and Candy Crush Soda Saga are in the top-five highest-grossing mobile games to this day. No-one seems to talk much about the browser and Facebook versions of Candy Crush, but I’d imagine they’re sweet little earners in their own right.
Still, makes Star Wars seem like a veritable bargain for Disney, eh? Whether buying King.com for a cool $18 per share is shrewd business sense or unbelievable folly from Activision Blizzard remains to be seen, as does what it means for its historically enormous investment in trad. videogames, but in the meantime, expect its logo to be even more ubiquitous than it already was.
Commented Activision Blizzard CEO Bobby Kotick, “The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment. With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before.”
TL;DR: “Money money money money money money money.”
The purchase is due to complete by next spring.