Video-game publisher Activision Blizzard Inc. is taking a big step into the mobile world, acquiring King Digital Entertainment, the maker of Candy Crush games, for $5.9 billion.
The deal will create the second biggest game company in the world, after Tencent, says the research firm Newzoo. It will have some 500 million active monthly users around the world.
The move is something of a gamble for Activision.
King has developed more than 200 exclusive games and has a network of 330 million monthly users.
Still, King has so far been unable to follow Candy Crush with comparable successes, the New York Times reported:
“So far, Candy Crush has remained a steady performer, ranking third in the Apple app store’s top-grossing games three years after its release. But the company has said that the juggernaut has slowed down, and other games are not as popular — not even Candy Crush Soda, a related title released last year.”
On the other hand, mobile is growing fast, and King is rumored to have several games in the pipeline, says Newzoo CEO Peter Warman:
“Having King’s experience in running and monetizing mobile games as a service will be a priceless asset to a company that is still on the learning curve when it comes to mobile.”
Activision’s CEO, Bobby Kotick, told NPR’s Laura Sydell that the company was eager to participate in the mobile-game boom, which is expected to generate revenues of $100 billion over the next three years.
“As we started to make investments in mobile game development on our own, we realized it was going to be a very complicated, tricky thing and probably would not be so successful for us, until we really got up to speed on the subtleties and idiosyncrasies of the business.”
Moreover, Activision is betting on the fact that it can sustain the popularity of Candy Crush, much as it has with its most popular video games, such as Call of Duty and World of Warcraft.
King CEO Riccardo Zanconi said the deal would position the company for the next phase of its evolution:
“We will combine our expertise in mobile and free-to-play with Activision Blizzard’s world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide.”