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

Re:We know

[Eloking]

We read that in the paper newspaper a few days ago.

A quick custom Google search tell me that the first time this news came out was 20 hours ago. Still I get your point.

I'm surprised that it appeared so late on /. It's usually one of the first place I would expect to read news like this one.

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.

Re: Holy shit...

[Anonymous Coward]

King's game revenue comes almost entirely through in-game purchases of gold bars, which are effectively treated as the currency for their games. You can use them to purchase an extra few moves if you run out but are close to winning a level (called EGPs), and you can use them to refill your lives if you run out, without having to wait for them to re-fill at the rate of 15-30 minutes per life (depending on the game). The only ads in King games are for other King games (called cross-promos).

King's games are a popular thing to hate lately, but the fact is that a huge amount of ongoing work goes into their titles - most of them see new batches of levels every two weeks, and new gameplay mechanics, boosters, and features every month or two. The games are constantly being improved, and the high bar of quality is why King's games have done well while other dime-a-dozen match-3 games haven't.

The other thing to keep in mind is that you can get every last byte of content out of the games without ever spending a penny. Yes, early on there are collaboration locks, and you need to wait for lives to refill, but at the end of the day you can do it if you're patient. King makes its money because most people aren't.

Re:Holy shit...

[Anonymous Coward]

A little video about Candy Crush's success, from a design perspective.

Re:Holy shit...

[Harlequin80]

My wife is addicted to them. Fortunately though she is a complete miser when it comes to spending money on things like this so she hasn't spent a cent. But the level of competition between her and my mum for top spot in candy crush, and Alpha Betty (another one by King) is terrifying.

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.

King: the least ethical game studio in the world

[Sowelu]

Their abuse of copyright and trademark to screw over smaller developers is nothing short of legendary. It will be really nice to see them on a shorter leash. Even putting them under EA ownership would have been better than their CEO running wild; mobile development is a much safer place for indie devs with them bought out.

A new record

[nobuddy]

largest accidental in-app purchase ever.

Re:A new record

[Anonymous Coward]

How I imagine it came about:

Exec 1: "With the amount of money my wife/kid dumps into those mobile games I bet I could have bought the company by now"
Exec 2: "You know that's a really good idea; we should just buy them"

Crushed it

[PopeRatzo]

Activision paid over $1billion more for Candy Crush than Disney paid for the Star Wars franchise.

Re:Crushed it

[cfalcon]

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