Close X
Sunday, November 10, 2024
ADVT 
Tech

Activision Blizzard, Seeking Mobility, Offers $5.9 Billion For Candy Crush Maker King Digital

Darpan News Desk The Canadian Press, 03 Nov, 2015 11:13 AM
    Activision Blizzard will pay $5.9 billion to buy Candy Crush maker King Digital Entertainment, combining a console gaming power with an established player in the fast-growing mobile gaming field.
     
    Activision, which owns the extraordinarily successful "Call of Duty" series, said the deal will create one of the largest global entertainment networks with more than half a billion combined monthly active users in 196 countries.
     
    It also will help Activision get its games out of the living room and into the hands of potential players through smartphones and tablets, a market with seemingly unlimited growth potential.
     
    Activision said mobile gaming is expected to generate more than $36 billion in revenue by the end of 2015 and grow cumulatively by more than 50 per cent from 2015 to 2019.
     
    The deal also will help Activision diversify its customer base. CEO Robert Kotick told CNBC on Tuesday that about 60 per cent of King's audience is female.
     
    "Attracting women to gaming is a really important part of our strategy," he said.
     
    Still, questions remain about what the advantage will be for the two companies, and perhaps more importantly, to gamers.
     
    King has struggled to follow up on the success of its Candy Crush series, a game so pervasive that a British lawmaker was admonished after being caught playing it during a Parliamentary committee hearing.
     
    King's revenue fell 18 per cent to $490 million in the second quarter, and gross bookings also dropped 13 per cent, both of which the company attributed to the maturing of its Candy Crush franchise.
     
    Jefferies analysts Brian Pitz and Brian Fitzgerald said that replicating the success of Candy Crush is a daunting task.
     
    "We expect a heavy dose of skepticism from investors especially given the large deal size," the analysts wrote in a research note.
     
    Activision Blizzard Inc., based in Santa Monica, California, will pay $18 in cash for each King share, a 20 per cent premium over its Friday closing price. Kotick said the deal gives his company "a very productive way" to use foreign cash that had not been earning a lot of money.
     
    U.S. tax rates prompt companies to avoid transferring money earned overseas back home to the parent.
     
    The boards of both companies have approved the deal, but King shareholders must still vote on it and regulators in Ireland must also sign off. The companies expect it to close next spring.
     
    Shares of King Digital Entertainment Plc., which went public in March 2014, jumped 15 per cent, or $2.34, to $17.88 Tuesday in pre-market trading and after the deal was announced. Meanwhile, Activision slipped 12 cents to $34.35.

    MORE Tech ARTICLES

    Top Indian American Executive Rishi Garg Quits Twitter

    Top Indian American Executive Rishi Garg Quits Twitter
    The exit of Rishi Garg, Twitter's head of mergers and acquisitions, comes weeks after Twitter said it is replacing its CEO Dick Costolo with co-founder Jack Dorsey as an interim CEO, USA Today reported.

    Top Indian American Executive Rishi Garg Quits Twitter

    What Made Twitter Look Beyond 140 Characters?

    What Made Twitter Look Beyond 140 Characters?
    What could have made Twitter grow beyond being just a micro-blogging, social media site and relent on its strict 140-character limit - at least for direct messaging services?

    What Made Twitter Look Beyond 140 Characters?

    Here's Why You Spend Spare Time On Facebook

    Here's Why You Spend Spare Time On Facebook
    Can't help skimming through your Facebook timeline even as you take a break from work? You may just be wired to do so as the brain prepares us to be socially connected to other people even when we get some rest, says a new research.

    Here's Why You Spend Spare Time On Facebook

    Know Your Friends' Travel Itinerary With New Facebook Tool

    Know Your Friends' Travel Itinerary With New Facebook Tool
    An Indian American student has created a Chrome extension that grabs location data from Facebook Messenger and rapidly plots your friends' locations on a map, The Next Web reported.

    Know Your Friends' Travel Itinerary With New Facebook Tool

    Narcissist, Insecure People Post More On Facebook

    Narcissist, Insecure People Post More On Facebook
    People who post Facebook status updates about their romantic partner are more likely to have low self-esteem, a new research has revealed.

    Narcissist, Insecure People Post More On Facebook

    Now Enjoy 'Playboy' On Your Smartphone Sans Nudity!

    Now Enjoy 'Playboy' On Your Smartphone Sans Nudity!
    Are you a "Playboy" lover? Get ready to download it on your smartphone. The Chicago-based lifestyle and entertainment magazine has just launched its "Playboy Now" app.

    Now Enjoy 'Playboy' On Your Smartphone Sans Nudity!