In one of the biggest video game company acquisitions in history, Activision Blizzard is to buy the creator of Candy Crush Saga, King Digital Entertainment, for $5.9bn.
It is the biggest video games company acquisition since Microsoft acquired Minecraft for $2bn last year and it is certainly the biggest acquisition of a mobile gaming company ever.
Activision, maker of the popular Call of Duty console game franchise, has been itching to get into the lucrative mobile games space, but this is its biggest bet yet.
Mobile gaming revenues are projected to reach $36bn in 2015 and the sector is projected to grow by more than 50pc by 2019.
Combined audience of more than 500m active users
This acquisition will create one of the largest global entertainment networks with more than half a billion combined monthly active users in 196 countries. This global audience will reach across casual and core gamers, female and male players, and developed and emerging markets throughout the world.
During the 12 months to end 30 September 2015, Activision Blizzard had non-GAAP revenues of $4.7bn and King had adjusted revenues of $2.1bn.
“The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment,” said Bobby Kotick, CEO of Activision Blizzard.
“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.”
Activision will pay $18 a share in cash, which is a 16pc premium on top of King Digital’s closing price of $15.54 last night.
Both companies said that combining one of the largest mobile gaming communities with Activision Blizzard’s leading franchises creates potential opportunities to grow and cross-promote content to a diverse audience, while providing players more opportunities to engage with its content.
“We are excited to be entering into this Acquisition with Activision Blizzard,” said King CEO Riccardo Zacconi. “Since 2003, we have built one of the largest player networks on mobile and Facebook, with 474 million monthly active users in the third quarter 2015, and our talented team has created some of the most successful mobile game franchises.
“We believe that the Acquisition will position us very well for the next phase of our company’s evolution and will bring clear benefits to our players and employees. We will combine our expertise in mobile and free-to-play with Activision Blizzard’s world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide.”
Candy Crush image via Shutterstock