Activision Blizzard, the company behind video games like Call of Duty and World of Warcraft, just inked a deal to acquire King Digital Entertainment, the maker of wildly popular mobile game Candy Crush Saga. The acquisition will cost Activision a whopping $5.9 billion, and could cement the company’s position as a leading game creator–one that has yet to make its mark on the mobile front.
During a conference call on Tuesday, Activision CEO Robert Kotick noted that joining forces will allow the companies to “create a world class portfolio of games” and significantly expand its audience, “enriching the player experience” in the process. “We’ve never been in such a great position to deliver content to any audience on any platform,” Kotick said.
Despite the hefty price tag, this is a logical move for Activision: Acquiring King automatically grants it access to a huge, varied mobile audience, a point that the company itself made during the Q&A segment of the call. “As much as we could invest on our own, we couldn’t as quickly—or probably in that quality—get to the place that [King CEO Riccardo Zacconi] and team have gotten to,” an Activision exec explained. Candy Crush alone earned King about $1.33 billion in revenue during 2014, according to Kotaku.
King, which went public in March last year, has held two of the top five spots for highest grossing games in the App Store, over the past three quarters. As Zacconi reported during the call, King clocked 474 million active users per month and 133 million daily active users during the third quarter of 2015.
Last year, Fast Company‘s J.J. McCorvey wondered if Candy Crush could bring King the same success achieved by more traditional game companies like Activision. From the 2014 article:
Looking beyond Candy Crush, questions remain about whether or not King can be the first sustainable hit maker in an industry that has yet to produce its own Activision, or Pixar, or Disney. “Once you start talking going public, there’s a different set of expectations,” says Jesse Divnich, an analyst at the video game industry research firm EEDAR. “Investors want to see a growth plan. How are you going to grow the top and bottom line?”
If the company can be as clever with innovating new games as it is with unburdening addicted players of their cash, then a very sturdy growth plan might yet emerge.