{"id":64143,"date":"2015-11-03T23:03:34","date_gmt":"2015-11-04T05:03:34","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=64143"},"modified":"2015-11-03T23:03:34","modified_gmt":"2015-11-04T05:03:34","slug":"call-of-duty-maker-buys-candy-crush-company-for-5-9b","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2015\/11\/03\/call-of-duty-maker-buys-candy-crush-company-for-5-9b\/","title":{"rendered":"\u2018Call of Duty\u2019 maker buys \u2018Candy Crush\u2019 company for $5.9B"},"content":{"rendered":"
\"(Photo<\/a>
(Photo from Candy Crush Saga’s website<\/a>)<\/figcaption><\/figure>\n

NEW YORK \u2013 The company behind the hugely successful \u201cCall of Duty\u201d video games is launching an all-out attack on the mobile gaming market by shelling out $5.9 billion for the maker of \u201cCandy Crush Saga.\u201d<\/p>\n

Activision Blizzard\u2019s purchase of King Digital Entertainment will help it keep pace as video gaming continues to move away from TV-connected consoles to smartphones and tablets.<\/p>\n

And it\u2019s bound to add new players to Activision\u2019s ranks, such as women, who haven\u2019t been especially interested in the company’s violent games up to now.<\/p>\n

But the move comes at a hefty price, especially for a company that has seen its sales and profit drop in recent years.<\/p>\n

And while \u201cCandy Crush\u201d is notoriously addictive, it has waned in popularity for some time, and it’s unclear when or if King Digital’s next hit mobile game will come.<\/p>\n

It\u2019s becoming increasingly important for video game companies to make their products accessible in both console and mobile formats, making Activision\u2019s move an expensive but necessary one, said David Lord, CEO of JumpStart, a Torrance, California, company focused on educational mobile games for kids.<\/p>\n

\u201cThis gives them access to the mobile market at a time when the console market has had a tremendous year,\u201d Lord said, \u201cbut we\u2019re not sure where it\u2019s going to go.\u201d<\/p>\n

And it\u2019s not just console games that are moving over to mobile devices; mobile games are being played on consoles, too. It\u2019s about being able to reach players wherever they may be, Lord said.<\/p>\n

The takeover will create one of the world\u2019s biggest entertainment networks, with a combined total of more than a half-billion monthly active users in 196 countries, by Activision\u2019s count.<\/p>\n

Activision said it sees tremendous potential in the mobile gaming market, predicting it will generate more than $36 billion in revenue by the end of 2015 and grow more than 50 percent by 2019.<\/p>\n

But while people might not mind spending $60 for the latest \u201cCall of Duty\u201d game, many balk at the idea of handing over a few dollars on a game for their smartphone, making it tough to make money off such products.<\/p>\n

Most people play \u201cCandy Crush\u201d for free. The company makes money by charging them for more lives or other extras that allow them to play more often.<\/p>\n

\u201cIt\u2019s always harder to monetize on mobile, but on the same token you have many more people in mobile,\u201d Lord said. He said that if only a small fraction of the millions of people playing a hit game pay for extras, it can be a windfall for the game\u2019s owner.<\/p>\n

Hits can be few and far between. None of King\u2019s other games have been able to replicate the success of \u201cCandy Crush.\u201d King\u2019s adjusted profit fell 18 percent to $155 million in the second quarter.<\/p>\n

Jefferies analysts Brian Pitz and Brian Fitzgerald said repeating the success of Candy Crush is a daunting task.<\/p>\n

\u201cWe expect a heavy dose of skepticism from investors, especially given the large deal size,\u201d the analysts said in a research note.<\/p>\n

Meanwhile, the deal will undoubtedly help Activision attract more women as customers.<\/p>\n

Activision\u2019s fortunes tend to hinge on its latest \u201cCall of Duty\u201d game. Launched in 2003, the violent, first-person shooter games generated $11 billion in sales through the end of the 2014 fiscal year. Activision also makes the \u201cWorld of Warcraft\u201d and \u201cSkylanders\u201d games.<\/p>\n

While those kinds of games don\u2019t traditionally appeal to women, Activision CEO Robert Kotick told CNBC on Tuesday that about 60 percent of King’s audience is female.<\/p>\n

\u201cAttracting women to gaming is a really important part of our strategy,\u201d he said.<\/p>\n

While Activision stock has tripled over the past three years, its profit has fallen from $1.15 billion in fiscal 2012 to $835 million in 2014. King\u2019s stock hasn\u2019t made much headway since the company went public in March 2014.<\/p>\n

Activision, based in Santa Monica, California, will pay $18 in cash for each King share, 20 percent over its Friday closing price.<\/p>\n

The boards of both companies have approved the deal, but King shareholders must still vote on it, and regulators in Ireland, where King is based, must also sign off.<\/p>\n

King stock climbed 15 percent, or $2.31, to $17.85 Tuesday afternoon. Activision rose $1.25, or 3.6 percent, to $35.82.<\/p>\n","protected":false},"excerpt":{"rendered":"

NEW YORK \u2013 The company behind the hugely successful \u201cCall of Duty\u201d video games is launching an all-out attack on …<\/p>\n","protected":false},"author":33,"featured_media":64144,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[35],"class_list":["post-64143","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-original","mauthors-bree-fowler","mauthors-tom-murphy","mauthors-the-associated-press"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/64143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=64143"}],"version-history":[{"count":0,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/64143\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/64144"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=64143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=64143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=64143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}