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Activision buys Candy Crush for 5.9 billion dollars
Topic Started: Nov 3 2015, 06:28 AM (171 Views)
Zero EXE
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http://www.bbc.com/news/business-34707701

This is ultra hilarious just from a price perspective, there's no way King is worth anywhere near that much, especially if you think about what they are going to do with it. I mean, Candy Crush is going to decline year over year and I don't think a sequel is going to be anything incredible.

Seems like a desperation move for some kind of major growth, considering CoD has been on a downtrend for the past 3 years or so and WoW keeps losing subs. But Activision is a weird ass thing and always has been, pretty much banking on one huge mainstream franchise that loses popularity right as another one takes over. Only this time, they don't seem to have anything lined up to replace Call of Duty.

I thought we were past the era of companies betting it all on mobile, but I guess not.
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Hiromu Shinbo
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Isn't Destiny technically in their portfolio now? Might be the replacement for CoD... (which I would actually only consider getting again at this point if they brought it back to WW2. Not sure why)

And the way they released The Taken King (bundled with the complete game already, if I recall) seemed like a very Activision thing to do.

Haven't looked it up yet, but microtransaction dollars for Heroes of the Storm would be interesting to see. We know Hearthstone brings in decent $$$ already. Then there's Overwatch, IF it becomes a thing
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Zero EXE
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Bungie is an independent studio, so that probably cuts into Activision's profits on Destiny. It's also not doing nearly as well as Call of Duty is right now, though it's undoubtedly a success financially.
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gundamtotoro
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Just for comparison, Disney bought Marvel for $4 billion and Star Wars for not much less that that.

Microsoft paid about 2 billion for Mojang for Minecraft.
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SonicSP
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Initially I thought this wasn't a good move, then I heard that only around 30% of King's revenue come from Candy Crush as well as listened some analysis/opinions from my regular tech podcast show and I changed my mind. Well......I can see the logic behind it at least.

I think is a good move considering how diversified Activision-Blizzard's offerings are. I do agree that it's expensive though but I feel like it gets them a better grip on the casual mobile market. The move is not without its risk though since King has declined since its IPO last year and its net income is only around $110-160 million per quarter. It would be awhile before it makes its money back, assuming they can keep its current performance level which isn't even guerenteed.

This will be an interesting story to follow personally for me regardless of whether this goes great or goes bust, then again I say that for just about any famous game company - casual or not.

Quote:
 
And the way they released The Taken King (bundled with the complete game already, if I recall) seemed like a very Activision thing to do.


I think that may be the case physically but digitally you can still buy Taken King if you already own Destiny. I think the price of the Taken King digital alone is $40 (I know I recall doing this for mine) while the physical Taken King plus main game bundle is $60.

Whether own thinks the Taken King expansion is worth $40 is another story though. I don't personally, but I have a friend who have already gotten his money's worth based on how much he enjoys and plays the expansion.

Now that I think about it.....haha Activision, "taken" "King".

Edited by SonicSP, Nov 4 2015, 08:56 AM.
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NewtypeS3
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Really, it amazes me that Activision paid that much money for a company that literally does nothing but take existing game ideas, file off the serial numbers, and then make it dependent on microtransactions.

Which, I'll be honest, is completely devious... but it is far from a truly sustainable model.
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SonicSP
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To be fair, Blizzard has begun to embrace microtransactions as well with some of their free-to-play games Hearthstone and Heroes of the Storm. The business model and game designs are much more well received than King's among traditional gamers, but they are still some similarities between the two even if they are far from the same thing. Not that I think Blizzard free-to-play games are going to go King's way, King will probably handle that aspect of the offerings. The Blizzard brand is probabaly too valuable to go that way.

I still think this is just a good way for them to diversify their offerings save doing a King game themselves. The mobile games industry is maturing in the west and a little bit in Japan and are currently consolidating into a few large companies. This is kinda like the traditional games industry but happened at a much faster rate.

The next big opportunities in mobile gaming I think are in emerging countries that mostly skipped the traditional desktop architecture boom since their internet booms were more recent and went straight to mobile (some African countries and a few Asian countries for now and possibly more later on). Traditional games on consoles and PCs are much less common or embraced in these countries. My guess is Activision really wants to hit the ground running with someone who's knowledgable and capable at doing these. Their ideas may not be original (which is an understatement) but King has proven that they know how to make hits which sadly in the freemium mobile market is more about marketing and hype than actually making good games - or even original ideas.

That all being said, it's still quite a risk though especially considering the high price of the acquisition especially if the emerging market growths don't pan as well as Activision-Blizzard hopes it to be - or if the mobile freemium market just collapses. Still it's currently a big thing here in Asia I think especially in China and Japan. The other bad thing that could happen if there's a paradigm shift away from mobiles to something else much like mobile games took the steam away from Facebook games and the Wii casual sphere (as Zynga and Nintendo found out).

I also think it's also is because Activision plan to try to take some of their existing IPs and make mobile freemium versions of them and they want King to do handle the marketing. I think they mentioned cross marketing or whatever to be one of the advantages of the acquisition. I don't really see how King will help Activision Blizzard's traditional offerings though I just take it to mean they want King to make mobile games for them possibly using their Activision's existing IPs.
Edited by SonicSP, Nov 8 2015, 12:34 AM.
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Zero EXE
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On a podcast I listened to, they mentioned that most of the money (3.9 Billion or so) Activision used to buy King was from overseas, which if they wanted to use in the US, they'd have to pay a billion dollars in taxes. The rest was covered with credit. So basically they had extra capital and used it to buy up a mobile developer rather than let it rot in a bank for eternity. It still seems like a short sighted move that really banks on mobile being some huge cash cow in the future though.

In other activision news, WoW has stopped reporting subscriber numbers for the first time in history after falling to like 5 million and it's only going to get worse considering Legion won't drop until Summer 2016. Probably.
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