Activision Blizzard buys 'Candy Crush' maker in mobile push
By Eric Auchard and Leila Abboud
DUBLIN (Reuters) - Video game maker Activision Blizzard (ATVI.O: Quote) will buy "Candy Crush Saga" creator King Digital Entertainment KING.N 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 (MSFT.O: Quote) $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.
The deal also gives the U.S. company a major presence in the mobile market, where games sales are expected to grow 21 percent this year to $20.6 billion, according to research firm Newzoo.
That compares with expected growth of 7 percent for computer games and 2 percent for TV and console games, although they will still represent the lion's share of the $91.5 billion overall industry, according to the industry researchers. Continued...