On Nov. 2, Activision Blizzard expressed their plan of acquiring King Digital Entertainment, the brain behind the most addicting smartphone game Candy Crush, for a stunning US$5.9 billion. This is to aid in expanding global reach.
During its initial public offering, the company will acquire Candy Crush at a price of US$18 a share. This is a 20 per cent bargain from the original price of US$22.50 declared during the closing share price last Oct. 30. As per Financial Times, Activision will fund the US$3.6 billion in cash, while the remaining amount will be listed as a debt.
"Other than YouTube or Facebook there isn't a worldwide network that has a bigger number of audience members," Activision's chief executive, Bobby Kotick said. A big part of the opportunity is to explore the intellectual property that exists at Activision Blizzard and see if it makes sense in that network."
Although shares of the London-based company declined by 30 per cent this Monday at US$15.54 each, it does not hinder Activision Blizzard from making the deal as executives of the said California-based company sees the value of King's network of players. In fact, if both companies are combined, it could outturn more than 500 million users per month.
"Mobile gaming is the largest and fastest-growing opportunity for interactive entertainment and we will have one of the world's most successful mobile game companies and its talented teams providing great content to new customers, in new geographies throughout the world," Kotick said.
King's game strategy is the so-called freemium model wherein the game is available for free but in-app purchase like getting extra lives, virtual goodies and some other added contents can be made. Candy Crush was first launched in 2012 in Facebook and smartphones; it is still the source of over a third of the company's revenue.
