Activision Blizzard today announced that it has closed its acquisition of King Digital for $5.9 billion, a deal that it says makes it the largest game network in the world with more than 500 million users. King is the publisher of the popular Candy Crush series of social and mobile games, while Activision Blizzard’s best known titles include World of Warcraft and Call of Duty.
This also represents one of the most successful acquisition prices for a European startup, with King headquartered out of London.
Activision Blizzard estimates that the deal will bring it revenues of $6.25 billion for 2016, with operating income of over $2 billion. It originally announced its intent to acquire King in November 2015.
“We see great opportunities to create new ways for audiences to experience their favorite franchises, from Candy Crush to World of Warcraft to Call of Duty and more, across mobile devices, consoles and personal computers,” said Bobby Kotick, CEO of Activision Blizzard, in a statement. “On behalf of Activision Blizzard, we are delighted to welcome Riccardo, Sebastian, Stephane and all of King’s talented employees to our family.”
King will continue to be led by Riccardo Zacconi, its CEO. “We are thrilled to now be a part of Activision Blizzard and can’t wait to start working together,” he said in a statement. “I want to thank everyone at King for all of their hard work since we founded the company 13 years ago. We are excited about the future as we continue developing more exciting games and explore new ways to serve our players and build on the greatest franchises in interactive entertainment.”
King catapulted to the top of the mobile and social games rankings years ago on the back of the wildly popular Candy Crush series of games.
But when it came to a public listing, writing may have been on the wall for the company. As with so many other casual gaming plays — think Zynga and Rovio’s Angry Birds franchise — the health of the business is only as strong as the hit brand. By the time King filed its F-1 forms, its business was looking big, but also mature and nearing the end of its boom, with no strong follow up hits to replace the sugar rush of Candy Crush.
That’s not to say that Candy Crush is now unpopular: the flagship title, Candy Crush Saga, still ranks in the top 10 mobile games in the U.S. according to App Annie.
But that is a steady, not necessarily booming, business. When King filed for an IPO in 2014, it priced shares at a valuation of $7 billion, and then proceeded to flop. The $5.9 billion price Activision is paying, at $18/share, is well below the 2014 IPO price of $22.50 a share.