Activision Buys Candy Crush Developer For $5.9B (inquisitr.com)

ForgedArtificer writes: Activision Blizzard purchased Candy Crush Saga developer King Interactive Entertainment last night for a cool $5.9 billion USD; about 20% above market value. The move likely leaves them owning five of the top grossing franchises in the industry. "Candy Crush is one of the most lucrative games in the world, earning some $1.33 billion in revenue in 2014 alone according to a King financial statement. The studio, which operates Candy Crush and a number of similar games including Bubble Witch and Farm Heroes, grossed $529 million in the second quarter of 2015."

Comments

Holy shit...

[KGIII]

I'm neither a gamer nor a mobile gamer (the two are kind of different in my head). I'm just kind of shocked that this game is worth that much. I'd assumed (I've never played it) that it was just another mindless click game like the one about birds. If I am mistaken that doesn't really change much, to me. How the hell is the market that large? Who the hell is paying for these games or is it ads and user information that are the real value?

I would not have thought, ten years ago, that the mobile market would have this much capital involved. Someone just won the lottery which is kind of cool, I'm still surprised, however.

Re:Holy shit...

[Harlequin80]

Candy Crush is about as addictive as poker machines except instead of cash you get flashing lights and sounds. Basically you have an amount of in game currency that you can trade in for extra moves, special items (which let you complete levels easier), or more lives. You can play it heaps without paying a cent, but you might have to wait 4 hours to get more lives.

I think one of the biggest hooks is it integrates with facebook and you can see where your friends are relative to you in the level count. It then makes a big deal of you overtaking your friends.

The reason they make such a killing is a massive install base that can play at any time. It takes no effort to play, you have the device with you always, and the individual cost per item is quite low. So you're on the train and you almost did that level, well $1 for 5 extra moves and I can overtake my mate - done.

Re:Holy shit...

[CanadianMacFan]

Well, they had over a $1B in revenue last year so it's not that bad of a valuation on the surface. The trouble is these companies tend to rise up fast and come down just as fast. They have to keep on putting out new addictive games that people will spend money on credits/coins/tokens for. That's very hard to do.

But it must be said that it's a lot more respectable than valuing Uber at $51B.

Surely it will work out....

[Luthair]

because mobile game companies have a stellar record of long term success, just look at Rovio and OMGPop.

Re:I think they overpaid

[Shados]

Are you thinking Zynga?

And i think the price takes that risk in consideration. Over 2 billion a year in revenue, but bought for 6b~. In the current unicorn bubble, that's on the low side.

Re:Crushed it

[cfalcon]

They didn't just buy Candy Crush though, they bought a whole company.

Re:Crushed it

[JaredOfEuropa]

The company and the game itself (source code) are worth bupkis. It would be trivially easy for any developer worth their salt to duplicate the game, and King aren't exactly a paragon of innovative game development. They scored a hit and managed to capitalize on it; as others have explained here, their other games are derivative, some better than others, but they are mostly successful because they can plug the hell out of those other games in the already popular Candy Crush. What Activision are buying is the IP and the eyeballs; if all of King's employees quit after setting fire to the office and burning the only backup of the game's source code, Activition won't have lost much.