Activision Buys Candy Crush Saga Publisher King For $5.9 Billion

Posted on November 9, 2015 by
Activision Buys Candy Crush Saga Publisher King For $5.9 Billion

One of the biggest publishers of traditional games in the world now also owns one of the biggest mobile publishers.

Call of Duty, World of Warcraft, and Candy Crush Saga - three of the biggest games in the world, all catering to different platforms and financial models - now all belong to Activision after the publisher spent $5.9 billion to acquire King Digital, the company best known for the Candy Crush and Farm Hero games. This means that Activision paid $18 per share, or a 20% premium over King's closing price on October 30th, to acquire the mobile behemoth. This purchase should help Activision diversify its business. It was already making a push into mobile and free-to-play, but this move instantly adds a number of high-profile and lucrative hits. Instead of trying to build mobile games that appeal to a global audience, it can just use what King has already created.

But only one other game deal really comes close to this one, and that's when Activision merged with World of Warcraft publisher Blizzard back in 2008. Estimates put that deal at approximately $18.8 billion.

"The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment," Activision Blizzard chief executive officer Bobby Kotick said in a canned statement. "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."

While Kotick points out that having control of King puts Activision well ahead of its primary competition of Electronic Arts and Ubisoft, he will also let his new microtransaction factory continue to operate as a separate subsidiary. The current leadership of chief executive officer Riccardo Zacconi, chief creative officer Sebastian Knutsson, and chief operating officer Stephane Kurgan will continue to oversee King.

"Riccardo, Sebastian, and Stephane are some of the best minds in the business," said Kotick. "Activision Blizzard will provide King with experience, support, and investment to continue to build on their tremendous legacy and reach new potential. We share an unwavering commitment to attracting and developing the best talent in the business, and we are excited about what we will be able to accomplish together."

This is an enormous deal that shakes up the gaming landscape. Prior to this acquisition, both Activision and King were among the 10 biggest public companies in terms of game revenues. Owning World of Warcraft, the world's biggest subscription-based massively multiplayer game, and Blizzard's fleet of free-to-play PC online games like Overwatch, Heroes of the Storm, and Hearthstone: Heroes of Warcraft (which also does quite well on mobile), Activision now has a similar level of diversity as some of its competitors. Activision also has Call of Duty, one of the most successful game franchises in history and it publishes the megapopular online shooter Destiny, which developer Bungie plans to support for a decade. Not to mention it has a strong interactive-toy brand in Skylanders.

With King, on top of everything else, Activision now has an obvious way of generating serious cash from all aspects of the gaming business. After all, the companies most capable of developing for multiple platforms stand to make the most money.