No need to get confused. Here we talk about a company King Digital Entertainment that has developed one of the most popular games Candy Crush Saga. The company has set a milestone in the mobile gaming industry with its one of the most popular games in the app store regarding the number of downloads. Still the game tops the chart of most downloaded games.
Recently, the makers of Candy Crush Saga have set another record: In the recent deal, the game developer company is sold at a whopping $5.9 billion. The top video game publisher based in the US, Activision Blizzard has announced a deal of buying King Digital Entertainment as an attempt to solidify its position as the largest and the most profitable company in interactive entertainment domain.
Here is a small list of a few biggest deals we can compare with the recent deal:
- Facebook bought Oculus Rift for $2 billion
- Disney bought ‘Star Wars’ and all its intellectual rights for $4 billion
- Microsoft bought ‘Minecraft’ for $2.5 billion.
Here, the question arises: Why did Activision pay this much amount to buy King Digital Entertainment?
Why Does Activision Pay this much amount?
Activision seems to bet big on the mobile platform as it opts for buying King Digital Entertainment. Today, the company has cash cows like Call of Duty, Skylanders, and World of Warcraft, but nothing can come on the level of Candy Crush. Destiny, one of the famous video games published by Activision, has started increasing revenues, but then, the company struggles in maintaining the revenues of World of Warcraft with decreasing number of gamers. Activision tends to buy games that can produce revenue on YoY (Year-on-Year) basis, and a game like Candy Crush is an ideal fit in this criterion as it is proven as a consistent profit generator.
However, it is hard to say whether or not Candy Crush Saga will continue its profit trail. In the ever-changing world of apps and mobile games, it is difficult to attract new people and retain the existing users for long. Silver lining is that the King Digital has recently released Candy Crush Soda Saga, and is currently at #6 on the app store.