Tuesday, November 3, 2015

Activision to Buy King Digital

Video game maker Activision Blizzard will buy "Candy Crush Saga" creator King Digital Entertainment for $5.9 billion, as the heavyweight of console and PC-gaming makes a major push into the faster-growing mobile market.

The deal is one of the biggest in the industry in recent years, more than twice the size of Microsoft Inc's $2.5 billion purchase of "Minecraft" maker Mojang last year, and the biggest-ever acquisition of a mobile gaming company.

The failure of Dublin-based King to replicate the success of Candy Crush with follow-up titles such as "Farm Heroes" and "Pet Rescue" has led some investors to think it may be a one-hit wonder.

But Activision, whose shares were down 0.5 percent at $34.43 in early trading, is betting that its experience in sustaining long-running blockbuster franchises like "Call of Duty" and "World of Warcraft" can help it develop new hit series.

Cowen & Co analysts described the deal as "an absolute steal", but others expressed skepticism.

"The combination increases Activision's scope and scale, but more importantly gives the company another top-quality IP (intellectual property) creator," the Cowan analysts wrote.

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