Activision Blizzard buys Candy Crush maker for $8.3b

Candy Crush Saga was developed by King Digital Entertainment, whose shares will be acquired by Activision Blizzard for US$18 each, a premium of 16 per cent to King's closing price on Monday.
Candy Crush Saga was developed by King Digital Entertainment, whose shares will be acquired by Activision Blizzard for US$18 each, a premium of 16 per cent to King's closing price on Monday.PHOTO: AGENCE FRANCE-PRESSE

Gaming giant hopes to broaden reach of its games and expand into new demographics

NEW YORK • Video game maker Activision Blizzard said it will buy Candy Crush Saga creator King Digital Entertainment for US$5.9 billion (S$8.3 billion) to strengthen its mobile games portfolio.

The acquisition of King also means that Singapore game developer Nonstop Games will come under the US-based company.

ABS Partners CV, a unit of Activision Blizzard, will acquire King shares for US$18 each in cash, representing a premium of 16 per cent to King's closing price on Monday.

The addition of King's mobile games will position Activision as a global leader in interactive entertainment across mobile, console and PC platforms, Activision said in a statement.

Video game publishers are shifting to the lucrative digital business from physical sales of games as consumers shift from consoles to playing on smartphones and tablets.

The fast-growing mobile gaming segment is expected to generate more than US$36 billion in revenue by the end of this year, according to Activision.

Activision Blizzard chief executive Bobby Kotick told Reuters that buying King will help it broaden the reach of its games and expand into new demographics, adding that 60 per cent of King's players are female and that no gaming consoles or hardware, besides a phone, is needed to play King's games.

"You have such broad reach. This is a fantastic opportunity for us to create compelling content for new demographics," Mr Kotick said.

Activision, which owns popular game franchises such as World Of Warcraft, Call Of Duty and Diablo, said the deal gives the combined company more than 500 million monthly active users worldwide and would add to Activision's estimated 2016 adjusted revenue and earnings by about 30 per cent.

Dublin-based King will continue to operate as an independent operating unit led by chief executive Riccardo Zacconi. Mr Zacconi told Reuters that Activision appealed to him because of its expertise in building long-lasting franchises.

King, which went public last March, has been struggling to boost bookings - an indicator of future revenue. The deal, expected to be completed by spring 2016, is subject to approval by King's shareholders and the Irish High Court, and clearances by antitrust authorities.

Activision said it wi,ll use US$3.6 billion of offshore cash and borrow the rest from Bank of America Merrill Lynch and Goldman Sachs Bank as incremental lenders.

Singapore's Nonstop Games, which developed multiplayer mobile strategy game Heroes Of Honor, was acquired by King in August last year for up to US$125 million.

The company was established here in 2011 under the name GamesMadeMe, and renamed Nonstop Games in March 2012.

It was founded by four Finns - chief technology officer Teemu Ikonen, lead programmer Henrik Karlstram, chief executive officer Juha Paananen, and president Henric Suuronen.

Nonstop released two games in 2012 - Dollar Isle and Painstars - before launching Heroes Of Honor in 2013 which was met with acclaim. However, Nonstop shut down the game in July this year and currently does not have any games available in the market.

Additional reporting by Lester Hio

A version of this article appeared in the print edition of The Straits Times on November 04, 2015, with the headline 'Activision Blizzard buys Candy Crush maker for $8.3b'. Print Edition | Subscribe