If you haven’t been bombarded at some point with numerous Facebook notifications to join your friends for a round of Candy Crush, consider yourself lucky. You can’t shake a stick without hitting somehow hitting something related to Candy Crush (an iOS users know all too well about tricky banners that automatically transports you to App Store in an effort to get you to download the freemium game). Given the hysteria surrounding the Candy Crush franchise, developer King Digital must be doing something right.
Activision Blizzard was definitely taking notice, and this week announced that it has reached a definitive agreement to purchase King Digital for a staggering $5.9 billion. At $18 per share, this represents a 20 percent premium over King Digital’s closing price on October 30th. For reference, Microsoft paid a mere $2.5 billion for Minecraft maker Mojang just over a year ago.
“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,” the company said in its news release announcing the sale.
According to Activision Blizzard, mobile gaming represents a huge growth potential with industry revenue expected to top $36 billion by the end of 2015. That figure is expected to swell by 50 percent by 2019, and shows no signs of slowing down.
“The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment,” said Activision Blizzard CEO Bobby Kotick. “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.”
Now that it is within the safe confines of Activision Blizzard, King Digital will hope to avoid the same fate as its rival, Zynga. Zynga’s FarmVille and FarmVille 2 were one some of the hottest properties in the social and mobile gaming sector, but the company has gone on to become a has-been both with gamers and with investors as it failed to capitalize on its dominant position in mobile gaming.