US computer game company Activision Blizzard has said it’s acquiring the UK’s King Digital Entertainment, the company behind Candy Crush. It means the coming together of two different business models.
Activision reported Tuesday it was buying the Candy Crush maker in a deal valued at $5.9 billion (5.4 billion euros).
The US computer game company is offering $18 per King Digital Entertainment share, a relatively moderate premium on Monday’s closing price of $16 per share.
Activision said in a statement the merger would make it a global leader in interactive entertainment across mobile, console and PC platforms. It’s bringing together the US firm’s World of Warcraft and Call of Duty as one of the world’s best-selling console games and KDE’s Candy Crush, which has been among the most popular games on mobile devices.
‘Freemium’ all the rage
For Activision, the merger is seen as a strategically important move as video game publishers increasingly move away from selling games physically towards making money out of people playing on smartphones and tablets.
Such games are normally offered for free, but users are encouraged to buy additional virtual goods for a better and more thrilling game experience, also dubbed the freemium business model.
King Digital Entertainment had seen its revenue drop by 14 percent in the second quarter as interest in Candy Crush started waning and no equally successful game had been developed in the meantime.
The company’s bottom-line profit for the quarter dropped by 27 percent compared with the first three months of the year. At the same time, the number of active users fell by 9 percent, but still hovered around 500 million.
hg/ng (dpa, AFP, Reuters)
