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posted by martyb on Wednesday November 04 2015, @12:21AM   Printer-friendly
from the game-on! dept.

MarketWatch/WSJ reports:

Activision Blizzard Inc. late Monday said it is acquiring King Digital Entertainment PLC for $3.4 billion in cash plus debt, combining two giants in the videogame industry.

The deal gives Activision a powerhouse in console videogames with hit franchises such as "Call of Duty" and "World of Warcraft," a beachhead in the fast-growing business of mobile games.

King shot to fame in 2012 with its hit "Candy Crush Saga," helping to position casual and inexpensive smartphone apps as a viable alternative to pricier games played on TVs and personal computers. While many of King's other mobile games haven't reached the same level of success, "Candy Crush" and its sequel are still among the top-grossing apps on Apple Inc.'s App Store.

Activision can't pay for the full value of Candy Crush out of pocket:

Activision said it is paying $18 a share, a 20% premium to King's 4 p.m. ET price of $14.96 on the New York Stock Exchange on Oct. 30. On Monday, King shares rose 3.9% to $15.54. Activision is using $3.4 billion in cash, plus a $2.3 billion loan, to pay for the deal.


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  • (Score: 2) by frojack on Wednesday November 04 2015, @02:51AM

    by frojack (1554) on Wednesday November 04 2015, @02:51AM (#258248) Journal

    The IP will be worthless and the user base will be gone within 5 years.

    Why? Is the mobile industry suddenly going to shift to a different processor or something that makes the render engine useless?
    Are all those players going to swear off any more games using that engine?

    5 years is a long time to reel in profits, not only from Candy Crush, and follow ons, but also to move some of the Activision titles that have never done well on mobile platforms. They King programmers may pay for themselves within 2 years, let alone 5.

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  • (Score: 2) by Non Sequor on Wednesday November 04 2015, @04:04AM

    by Non Sequor (1005) on Wednesday November 04 2015, @04:04AM (#258269) Journal

    As far as I can tell, all of these types of games end up showing some signs that people get tired of the gameplay and/or become less susceptible to the monetization scheme. Even with a new coat of pant one or two times per year it starts to wear thinner as time goes on and you have to come up with something much different to generate the same kinds of profits. The trouble is, someone else is probably going to come up with something "much different" before your company does. The second act is the problem here. That was the basis for my suggestion that you set these things up to be a one act play to begin with (where I'm including follow-up titles and merchandising as part of that one act).

    From Wikipedia, it looks like Candy Crush's revenue peaked in 2013 and sharply fell in 2014. Both of these years are $1b+, but Activision isn't going to get that. They're getting post-peak years and while it's going to continue to operate at a profit for a little while, the $3.2b valuation only makes sense if you have some level of belief that 2013 and 2014 are indicative of something that King's management can repeat, if even at a lower level.

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