Activision is paying $5.9 billion to acquire King Digital Entertainment. The move gets Activision further into mobile gaming and access to female users. Fred Katayama reports.
The macho game, "Call of Duty," will soon have the same owner as the deliciously sweet mobile mega hit, "Candy Crush Saga." Activision Blizzard is buying Candy's creator, Europe's King Digital Entertainment, for $5.9 billion. The combined company will now have more than half a billion monthly active users in nearly 200 countries. Activision gains several things: a bigger presence in the hot area of mobile gaming and a broader demographic. 60 percent of King's users are female, and its games appeal to people who are not hard-core gamers. And Activision says the acquisition will beef up next year's earnings by 30 percent. For that, Activision is paying a 20 percent premium. Jefferies analyst Brian Pitz said, "On the positive side, Activision has found a creative , tax efficient way to use its offshore cash as it enters the fast-growing mobile gaming market in earnest. On the negative side, King bookings are declining ...." King has yet to come up with a blockbuster that replicates the success of Candy Crush. King shares, which went public last year, soared but Activision gave ground. Separately Activision reported that it swung to a quarterly profit from a loss last year, and those results crushed estimates.