Call of Duty and Word of Warcraft fame Activision Blizzard Inc. has just made a deal to acquire King Digital Entertainment Plc, best known as the maker of one of the most popular mobile game Candy Crush. Activision Blizzard Inc. has agreed to pay $5.9 billion for this deal. Activision Blizzard Inc. is the franchise owner of most successful console and PC games such as Call of Duty, Guitar Hero and World of Warcraft series. With this huge deal, Activision is eyeing the highly growing mobile gaming market.
According to reports posted on Bloomberg, Activision will pay $18 a share in cash and 16% premium to King Digital’s closing price of $15.54 on Monday in New York. That’s 20% lower than King’s initial public offering price of $22.50 back in March 2014.
“Now is the right time to enter mobile gaming.” – says Bobby Kotick, Activision Blizzard Inc CEO. According to previous reports, Kotick has helped Activision to boost their stock 72% in current year. There is no wonder a company like Activision is looking for ways to enter and settle in the whooping mobile gaming market. Mobile gaming industry’s growth is expected to reach $36 billion by the end of current year.
Now is the right time to enter mobile gaming.
The merger between Activision Blizzard Inc. and King Digital Entertainment Plc is expected to be completed by spring 2016. Riccardo Zacconi, CEO of King Digital, will continue to lead the operations as independent unit of Activision. “It’s the next step. This opens up opportunities we didn’t have before.” said Zacconi, co founder of King Digital.
There is no surprise a company like Activision is looking for ways to enter mobile gaming market. The decision to make an entry by buying out Candy Crush franchise is strange though. According to Bloomberg report, the deal will help Activision save a lot of tax-money. But besides that, how much this partnership will grow and help Activision gain a stable place in the mobile gaming industry. As far as King Digital is concerned, they have developed only two mobile games so far, Candy Crush Saga and Candy Crush Soda. Both these games are highly popular but the question here is – how far can this Candy Crush franchise go? It is certain that no developer could survive the business with just one game and King Digital is still struggling to come out with a successor to Candy Crush.
It will be interesting to see if this deal helps Activision to tighten its place in mobile gaming market. I don’t know if Activision will start developing a first-person Candy Crush shooter now. Just kidding! What are your thoughts on this deal? Has Activision made a right choice? Will this merger help Activision survive in the mobile gaming industry? Your comments are welcomed.
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