Activision Blizzard buys Candy Crush maker King Digital Entertainment

The dawn of a new ‘saga’

In what comes as huge development, Activision Blizzard, the parent company of the huge computer game company Activision, have announced that they would be buying Kings Digital Entertainment, the makers of Candy Crush Saga in a deal worth $5.9bn (3.8bn Euros).

According to BBC news, the much talked about deal is expected to come to fruition in the second quarter of 2016 after the approval of all the shareholders and its compliance with the regulations.

The creators of mega franchises such as World of Warcraft and Call Of Duty, Activision, have gone out to say that the takeover would make them a global frontrunner when it comes to gaming and entertainment across all available platforms including console, mobile, and PC.

With an estimated monthly average of over half a billion users in over 196 countries after the acquisition, Activision might have hit a jackpot in a day and age where users are shifting from playing physical game copies on consoles to tablets and mobiles.

The takeover ensures an increase in reach for the gaming giant – who look to penetrate the market of Kings Digital, which has a dominant female demographic which accounts to almost 60% os its users.

Activision Blizzard chief Bobby Kotick by stressing the importance of a widening appeal, said, “With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before."

The magnanimous success of Candy Crush internationally has been attributed to it’s rabid popularity in Asian countries namely Japan, China and Korea. In spite of the deal, King Digital would resume its operations as an independent unit under chief executive Riccardo Zacconi from London and Stockholm.

By being optimistic on the company’s evolution, Zacconi said, “Since 2003, we have built one of the largest player networks on mobile and Facebook, with 474 million monthly active users in the third quarter 2015. We believe that the acquisition will position us very well for the next phase of our company's evolution.”

Activision has agreed on a very lucrative deal as they have finalized to pay $18 (£11.66) in cash for each King share that have boosted their expected earnings by 30%. Back in March, Kings Digital were listed on the New York Stock Exchange with a $22.50 (£14.60) share price, which closed at $15.54. (£10.06).

When it comes to the rise of Kings Digital and its marquee game, it’s Facebook and smartphones launch in 2012 marked the beginning of its good fortunes. Candy Crush went on to be a viral phenomenon and till date accounts to a majority of the company's revenue.

No other game from its repertoire of more than 200 games that include Farm Heroes has been able to upstage the mammoth success and reach of Candy Crush.

It would be tough to replicate the success of Candy Crush and Activision has its hands full. Piers Harding-Rolls, Head of Games at IHS Technology agreed and said, “Candy Crush Saga was such a massive global hit, it's a very difficult challenge to replicate that even if they release sequels or expansions to the original theme or release new titles."

“The share price reflects that. It's a big move by Activision who have gained access to an audience that does not overlap with its existing market, particularly in Asia," he added.

There has been a steady decline in the number of Candy Crush users, but Activision's takeover has the potential to change the existing trend.