The creator of the popular Candy Crush Saga game – King Digital Entertainment has been bought by Activision Blizzard. The deal is estimated at $5,9bn, which is the biggest acquisition in tech craze since 2011 when Hewlett Packard bought Autonomy for £7bn.
The purpose of the flotation is to make Activision the market leader in interactive entertainment and to increase the number of active users to 500,000 million across 196 countries. This deal is also considered a shift of the company’s focus from console games to digital ones because players nowadays are more interested in playing on smartphones and tablets. Activision Blizzard chief executive Bobby Kotick hopes that the combined company can broaden its reach and appeal to a larger demographic. The company also asserted that it would enable 60%, which were female, of King Digital Entertainment’s players to access its games without games console or hardware.
To be more specific, Activision is paying $18 per King’s share- 16% more than the closing price of King on Monday. The deal is also targeted to boost Activision’s revenue by 30%.
King Digital Entertainment, which is based in London and Stockholm, is led by chief executive Riccardo Zacconi. He expressed his opinion of the deal that the acquisition will enhance the company’s market position for the next developing phase. Since 2003, this company has built very large and strong player networks on mobile and Facebook. In the third quarter 2015, the number of monthly active users reached 474 million. Last year, the value of King Digital Entertainment was $8bn, which made the company become the most valuable British entrepreneur in tech sector.
Candy Crush Saga first launched on Facebook and smartphones in 2012. A year later, this game became a phenomena when reaching 500m installations on mobiles and Facebook. After the flotation, Candy Crush Saga came no longer top 10 downloaded games but it still contributes to about one- third of King’s revenues. It is also the most successful game of giant King amongst more than 200 games including Bubble Witch and Farm Heroes, which are also familiar to game players.
The deal might be the initial happy ending of Activision Blizzard when it helped many members of leader team become millionaires including its chairman Melvyn Morris. His fortune was later used to become the sole owner of his local football club, Derby County, in September. The book value of his asset was about $875m at that time and now he possesses almost of his stake in cash.
The vision of King’s chief executive in the future is combining with Activision Blizzard to sustain the most successful franchises and to bring the best games in the world to the world of game players.