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On Monday, Activision Blizzard announced that it would buy ‘Candy Crush’s maker King Digital Entertainment for a whopping $5.9 billion. So, the highly popular video game is now officially worth more than other big hits including Zynga’s FarmVille, Mojang’s Minecraft, and Rovio Entertainment’s Angry Birds.
Activision also said that it would buy all the company’s stock for $18 per share, which is a 20 percent increase than the share’s regular price. King shares weren’t very performing in recent months since investors feared that the game may have lost its popularity.
The IPO price was $20.50, and it never went beyond that limit since the company went public in the spring of 2014. Additionally, other makers of best-selling video games may just tell you how hard it is to come up with another hit after a world phenomenon.
Yet, Kind doesn’t seem to follow in FarmVille and Angry Birds makers’ footsteps as Candy Crush Saga is still extremely popular especially among female players. Most of us must have noticed those (not so) young women playing the game on their phone in the subway their entire ride.
In the App Store, Candy Crush Saga is still in top five of the most downloaded mobile video games, while its less-successful sequel Candy Crush Soda is listed on the sixth place. This tells a lot about the games’ popularity after three years, respectively one year following their release.
Yet although the recipe for success is basically the same, King Digital’s evolution was entirely different from Zynga’s. Both companies are the makers of two hugely popular casual video games that reached their peak.
Both companies saw their products become instant hits, and marketed the game through the same annoying methods. But while a company is now worth several billions the other is worth less than half. Zynga’s revenue is close to $700 million but its market cap can not go past $2.26 billion.
Yet, experts claim that the two companies are somehow different. FarmVille’s maker hemorrhages money and it is doing it for years. Furthermore, the company initially developed the game for desktops rather than focusing entirely on mobile.
On the other hand, King Digital started as a mobile-first company, so all its games are developed for smartphones (Zynga allocates only 19 percent of its cash to smartphone games).
So, Activision’s decision to buy Digital over other mobile game makers came naturally as the gaming giant has been struggling to enter the mobile game market for some time.
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