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Activision Buys Candy Crush Developer For $5.9B (inquisitr.com) 132

Posted by Soulskill from the no-bubbles-here-no-sir dept.
ForgedArtificer writes: Activision Blizzard purchased Candy Crush Saga developer King Interactive Entertainment last night for a cool $5.9 billion USD; about 20% above market value. The move likely leaves them owning five of the top grossing franchises in the industry. "Candy Crush is one of the most lucrative games in the world, earning some $1.33 billion in revenue in 2014 alone according to a King financial statement. The studio, which operates Candy Crush and a number of similar games including Bubble Witch and Farm Heroes, grossed $529 million in the second quarter of 2015."
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Activision Buys Candy Crush Developer For $5.9B More

Activision Buys Candy Crush Developer For $5.9B

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  • Holy shit... (Score:5, Insightful)

    by KGIII ( 973947 ) <uninvolved@outlook.com> on Tuesday November 03, 2015 @07:39PM (#50860209) Journal

    I'm neither a gamer nor a mobile gamer (the two are kind of different in my head). I'm just kind of shocked that this game is worth that much. I'd assumed (I've never played it) that it was just another mindless click game like the one about birds. If I am mistaken that doesn't really change much, to me. How the hell is the market that large? Who the hell is paying for these games or is it ads and user information that are the real value?

    I would not have thought, ten years ago, that the mobile market would have this much capital involved. Someone just won the lottery which is kind of cool, I'm still surprised, however.

    • Re:Holy shit... (Score:5, Insightful)

      by Harlequin80 ( 1671040 ) on Tuesday November 03, 2015 @07:51PM (#50860287)

      Candy Crush is about as addictive as poker machines except instead of cash you get flashing lights and sounds. Basically you have an amount of in game currency that you can trade in for extra moves, special items (which let you complete levels easier), or more lives. You can play it heaps without paying a cent, but you might have to wait 4 hours to get more lives.

      I think one of the biggest hooks is it integrates with facebook and you can see where your friends are relative to you in the level count. It then makes a big deal of you overtaking your friends.

      The reason they make such a killing is a massive install base that can play at any time. It takes no effort to play, you have the device with you always, and the individual cost per item is quite low. So you're on the train and you almost did that level, well $1 for 5 extra moves and I can overtake my mate - done.

      • Re: (Score:2)

        by KGIII ( 973947 )

        I'm glad I've never tried. I'd probably end up wasting time on it.

        • Re:Holy shit... (Score:5, Funny)

          by Harlequin80 ( 1671040 ) on Tuesday November 03, 2015 @08:38PM (#50860519)

          My wife is addicted to them. Fortunately though she is a complete miser when it comes to spending money on things like this so she hasn't spent a cent. But the level of competition between her and my mum for top spot in candy crush, and Alpha Betty (another one by King) is terrifying.

          • Depending on the phone she's using she can get more turns by setting the clock forward.

            • All good. All that has happened is she has added enough games that she can rotate through them. I quite like that she is also a fan of Clash of Clans and that game you can easily lose all your time to without spending money.

              • Re: (Score:2)

                by AK Marc ( 707885 )
                That was my strategy when I had lots of time to kill. A Kabam, a Super Cell, and a King game or two on rotation. 10-30 minutes each, then on to the next one, before coming back a few hours later, when there's enough energy or whatever to play for a while. Village builders and light arcade games, and you can play the free to play for free, and never run out of games to play. Though you'll never hit the leaderboards without spending cash, or in some cases (like Clash of Clans) be online 24/7.

                • Yep, currently COC + fallout shelter + One Piece Treasure Cruise and I don't have enough free time to use all my lives...

                  Don't really care about hitting the leader boards.... I've been grinding COC for so long now that I am close to maxed out anyway and I haven't spent a cent. Being in a really good local clan helped a lot to keep the interest high.

                  • Re: (Score:2)

                    by AK Marc ( 707885 )
                    My clan sucks, and I'm far from maxed. TH8, still need to spend some gold maxing walls, and elixir on research, otherwise maxed, for TH8. But I'm down to 5 minute a week, just subsistence.

                    • Find a new clan. My experience is clans based on location work the best. My clan is a Brisbane clan and it means everyone is on at the same time, same language and same culture. It's important to find a clan that donates lots and will get involved in wars. The war bonuses are too huge to ignore.

                      As a general rule I will do 4-5 attacks a day currently. Some of my clan mates are way way more serious than me. But at that level my builders have been busy constantly. Once you reach late TH9 the limiting th

                    • Re: (Score:2)

                      by AK Marc ( 707885 )
                      Got any spots in your clan? I've tried local, and there were not too many active, but a lot of inactive ones. And the world ones were pretty bad, timing and such the worst. Not too many issues with English, though I think they'd do well to use something like Google's real time translation and have the clan leader set the language displayed.

                    • Name of the clan is Brisbane Clash. Code #PQ29YJ00. Shield is a white Y shape on Black. Clan is predominately farmers who try hard at war. War is optional but if you opt in you must attack. As a general rule we are Aussies only but your welcome to hop in, I'll let the guys know. I go by Harlequin there as well so stick that in the request if you are going to come over.

            • Or if you are rooted, just save it in titanium backup before playing and then restore your game when you run out of lives.

              As far as cheating goes, this is an easy one and it pays off pretty well.

              All of the help items get restored when you restore your game (so you can just keep accumulated the free one iteam a day and let it add up over the days) and since your progress is tied in with facebook, restoring your game does not force you to start over.

          • Time is generally more difficult to replace than money.

          • My wife is addicted to them. Fortunately though she is a complete miser when it comes to spending money on things like this so she hasn't spent a cent.

            Sadly, she's stuck on level 6 out of 4,635,987.

      • Continuing with that thought, and maybe I'm reading it wrong, but the following article seems to say that a large portion of players aren't impatient enough to part with that $1. But the ones who do, they'll keep feeding the machine, to the point where "whales" actually exist in mobile gaming just like with casinos. The result is that revenue is highly dependent on a very thin sliver of game players:

        https://recode.net/2014/02/26/... [recode.net]

        • No question that this would be true. However in the case of King their install base is so huge that even .15% would be a large number of people.

          Anecdotally I was stunned once to find out that over half the people I worked with were all sinking money into Candy Crush at the same time (mid 2013). What really scared me was that they were talking about having spent over $100 each over the course of a weekend. Given my total app spend has been equal to the amount of credit I got with my original Nexus 7 I was

          • Very interesting, sounds like your sample was a group of mini-whales ;) It would be insightful to see what portion of the upper percentile on that player/spend chart are actually high disposable income folks (probably like your coworkers) vs. just highly-addictive personalities. Those two groups are obviously non-orthogonal but the question is whether affordability enters the equation, and thereby where do you spend your marketing dollars to target them if you're a game developer.

            Btw, also anecdotally, th

            • My co-workers at that time were all relatively young 20-25 but with a very diverse level of incomes. Some of them were earning huge amounts, others were barely scraping by (sales environment with commissions). That said a lot had reckless personalities and would, in my opinion, just waste their money on shit and hope to sort it out next pay day.

      • I have no idea how people get addicted to Candy Crush. I tried the game... found it was just another Bejeweled clone... only with limited moves, and how far you get is mostly based on luck. There was no real thrill, since it felt obvious that your fate was in the hands of luck (the candy placement is always random meaning that not even round has a winning outcome)... and all you really win is the ability to move to the next space. At least gambling machines give you a chance to turn your money into more

        • the candy placement is always random

          It's not ALWAYS random. There are some levels that are based on chain reactions, and those seem to have colors that fall in that cause the chain reactions (i.e. more than other levels).

          Plus for example, level 181 (the first Hard level, which I'm stuck on), has only a few open spots at all in the beginning... Though upon writing this, I honestly saw the VERY first time in many many tries where I didn't have a move and the level ended. EVERY other time (and upon restarti

    • Re:Holy shit... (Score:5, Insightful)

      by CanadianMacFan ( 1900244 ) on Tuesday November 03, 2015 @07:52PM (#50860289)

      Well, they had over a $1B in revenue last year so it's not that bad of a valuation on the surface. The trouble is these companies tend to rise up fast and come down just as fast. They have to keep on putting out new addictive games that people will spend money on credits/coins/tokens for. That's very hard to do.

      But it must be said that it's a lot more respectable than valuing Uber at $51B.

      • Re: (Score:2)

        by KGIII ( 973947 )

        I read the replies and that's still a huge amount of revenue for a mobile game. If I wrote such a game, I'd be impressed to even give it away. From reading the other posts (except my stalker - aren't they cute?) it looks like it's addictive (as you said) and there's gotta be some magical sauce here that someone could take advantage of. 'Snot my cup of tea, I'm not a good programmer, and I'm far too lazy but I expect you guys could do this. I just wonder how one gets the magic sauce which is popularity. I'd

        • The first Candy Crush was well written and very pretty, relative to its competitors. It then managed to get a good enough install based to get the "trending app" in the google store. From there it simply held top spot for ages, steadily increasing its install base. From there they have just get pushing out the games. Some have been crap, others well done. They are all pretty much derivative works but because they have gagillions of people in their captive audience they capture the market share really r

          • There isn't anything about them that makes you want to find an alternative.

            Actually, there is. I sometimes like playing the 'click three' type games. But Candy Crush Saga puts so much animation and filler crap that gets in the way of clicking three that I tried it for a bit, deleted it, and installed one of the free clones that is just a click three game.

            Candy Crush Saga adds animations of NPCs, and other side 'features' that detract from the actual crushing of candy.

        • Re:Holy shit... (Score:4, Interesting)

          by TapeCutter ( 624760 ) on Wednesday November 04, 2015 @03:16AM (#50861603) Journal
          It's a "Bejeweled" clone, which is a very simple and addictive game that you can still buy, the magic sauce is FB.
      • I've only ever played Candy Crush on an aeroplane. They're selling it as part of the seat-back entertainment system, which must bring in a fair bit (the input latency is quite painful, so it's not a great idea, which is a bit surprising, as Mario 3 worked well in seat-back entertainment systems 20 years ago). I don't know what other devices they license their games for, but they may have a few more unexpected revenue sources.

        • I've only ever played Candy Crush on an aeroplane

          I always wondered what pilots did between the five minutes at each end for taking off and landing .

    • Re: Holy shit... (Score:4, Informative)

      by Anonymous Coward on Tuesday November 03, 2015 @07:58PM (#50860331)

      King's game revenue comes almost entirely through in-game purchases of gold bars, which are effectively treated as the currency for their games. You can use them to purchase an extra few moves if you run out but are close to winning a level (called EGPs), and you can use them to refill your lives if you run out, without having to wait for them to re-fill at the rate of 15-30 minutes per life (depending on the game). The only ads in King games are for other King games (called cross-promos).

      King's games are a popular thing to hate lately, but the fact is that a huge amount of ongoing work goes into their titles - most of them see new batches of levels every two weeks, and new gameplay mechanics, boosters, and features every month or two. The games are constantly being improved, and the high bar of quality is why King's games have done well while other dime-a-dozen match-3 games haven't.

      The other thing to keep in mind is that you can get every last byte of content out of the games without ever spending a penny. Yes, early on there are collaboration locks, and you need to wait for lives to refill, but at the end of the day you can do it if you're patient. King makes its money because most people aren't.

      • Re: (Score:2)

        by KGIII ( 973947 )

        That sounds pretty trivial to write. Hell, a small server and you're good - for a while at least. Run it 'til the smoke escapes and throw up a new VM when it does. That's probably about the most difficult thing - if I'm understanding you correctly. It doesn't sound like graphics are too intensive or anything. It's seemingly just a click and grind game. :/

        You guys should get in on this filthy lucre!

    • Re:Holy shit... (Score:5, Interesting)

      by Anonymous Coward on Tuesday November 03, 2015 @08:21PM (#50860447)

      A little video about Candy Crush's success, from a design perspective. [youtube.com]

      • No mod points for me, but the video linked by the parent explains exactly why it's so successful and deserves moderating up.

    • Derivatives... Let's see them try to cash out that 5.9B note

    • How the hell is the market that large? Who the hell is paying for these games or is it ads and user information that are the real value?

      Dude, seriously?

      In ... app ... purchases; click here now to buy 16 more dongle-doodles to play faster.

      Sure, ads; but if you want to make real money, in-app purchases is a literal license to print money. So you have a game reward system tied to real money.

      It's basically a mobile slot machine. It's a monkey clicking the bar for a hit of crack.

      And if all of your Facebook f

    • The number of people that will pay $1 "because it's pretty much just pocket change" to get what, 3 more turns of a stupid flash game? is absolutely staggering.

      IIRC the guy that COPIED Kandy Krush and was ordered to cease & desist after something like a handful of months was pulling in $hundreds$ of 000's monthly in just that short time.

      And people think "democracy" has a chance in hell?

    • It isn't worth this much. We are in full blown bubble mode now. Activision just paid over $10 per supposed active user for a company that has had one success. This is Zynga all over again.
    • Like most games these days it's based on 20 year old game ideas that have been updated to match technology upgrades (Think Tetris for touch screens). As for Angry Birds that was just marketing the basic game engine had been doing the rounds for nearly a decade.

  • Surely it will work out.... (Score:5, Insightful)

    by Luthair ( 847766 ) on Tuesday November 03, 2015 @07:39PM (#50860211)
    because mobile game companies have a stellar record of long term success, just look at Rovio and OMGPop.
  • Its not hard to code a mobile match 3. A team at Blizzard could churn one out in under three months if they wanted to.

    • Re:Why not just code your own match 3? (Score:4, Informative)

      by Sowelu ( 713889 ) on Tuesday November 03, 2015 @07:47PM (#50860245)

      Branding is like, > 90% of business. Also a HUGE MASSIVE database of analytics and pre-loyal customers.

    • They didn't buy just the coded product, Activision gets a user base and all their delicious data and in-app purchases. Is that sweet or sour ?
    • While the 5.9b isn't really for the game, but the IP and brand recognition, you have to pursue this line of thought.

      If, rather than spending the ~6b, you hired a thousand teams of programmers & artists to create a thousand mobile games, and then dumped a billion dollars into marketing them all, what is the chance that you would have the next hit on your hands and a few billion left over? These sorts of games are cheap to make, why big companies don't crank them out assembly line style is beyond me.
  • I think they overpaid. This reminds me a lot of that other company from a few years back (I forget the name already) that had a popular micro-transaction based mobile app and was supposedly worth untold billions only for the value to collapse shortly after the IPO. Eventually the Candy Crush trend will be over and the users will be on to the next craze and there's no guarantee that the developers behind this craze can even come close to replicating their success.

    I suppose good on the guys who got $6 bill

    • Re:I think they overpaid (Score:5, Insightful)

      by Shados ( 741919 ) on Tuesday November 03, 2015 @07:48PM (#50860261)

      Are you thinking Zynga?

      And i think the price takes that risk in consideration. Over 2 billion a year in revenue, but bought for 6b~. In the current unicorn bubble, that's on the low side.

      • Re: (Score:3)

        by Nemyst ( 1383049 )
        But that's the thing - $2bn in revenue. In profit, you're talking more arounf $600-700m. Mind you, that's still a lot, and it's apparently still seeing growth, but those mobile games are very very fickle. Who's to say that it'll be there in a few years, let alone at least five if you want to just recoup the investment assuming massive profit growth?

        Activision better have a plan for turning that single-franchise acquisition into something longer lasting, but seeing their methodology with Guitar Hero and Ca

        • Re: (Score:2)

          by jonwil ( 467024 )

          Considering that Activision have gone from DLC to microtransactions for the latest Guitar Hero game, they obviously have experience in that area...

          • Re: (Score:2)

            by soren42 ( 700305 )
            Not just Guitar Hero, Destiny, too. And it's working —four of the top five PlayStation® Store for PS4 purchases are Destiny in-game currency this week.

          • Re: (Score:2)

            by Nemyst ( 1383049 )
            Yes, after a six-year hiatus because they had no fucking clue how to properly develop the franchise, instead literally flooding the market with multiple titles a year until people stopped being interested. They managed to take an extremely popular franchise and turn it into toxic waste in just a few years.
        • Most large companies make less than 20% ROI, so more like $100-200M pre-tax profit on $2B revenue.
          • Are King a large company? I should hope and expect that the ROI of a small-ish mobile game studio, having a mega hit game that is ridiculously simple from a development and infrastructure point of view, is significantly better than 20%. I wouldn't be surprised if it's in the 50% and up range.

    • True - But candy crush has a crazy install base. Lots of their other games have sucked but they got into the top 10 of games installed every time because of the ads that are inserted into candy crush. Make a slightly non-shit game and the same will happen. Make a good game and you have made a killing.

      • Re: I think they overpaid (Score:1)

        by Anonymous Coward

        Candy Crush is the reason I had to put restrictions on the App Store.
        Every other site visited on iPhone pops up the App Store on Candy Crush. Now nobody pops up the App Store on my phone.

    • Is the game you are thinking of "Draw Something", maybe? Zynga bought it for $210 million and shortly afterwards it fell out of the limelight and the had to write it off as a complete loss

    • I think they overpaid.

      I think that is what "paid a 20% premium" means.

  • King: the least ethical game studio in the world (Score:5, Interesting)

    by Sowelu ( 713889 ) on Tuesday November 03, 2015 @07:49PM (#50860267)

    Their abuse of copyright and trademark to screw over smaller developers is nothing short of legendary. It will be really nice to see them on a shorter leash. Even putting them under EA ownership would have been better than their CEO running wild; mobile development is a much safer place for indie devs with them bought out.

  • I wonder (Score:3)

    by 93 Escort Wagon ( 326346 ) on Tuesday November 03, 2015 @08:02PM (#50860353)

    So, in about a year, do you think we'll be reading blog posts from Bobby Kotick where he talks about how sad and lonely he is?

  • A new record (Score:5, Funny)

    by nobuddy ( 952985 ) on Tuesday November 03, 2015 @08:50PM (#50860573) Homepage Journal

    largest accidental in-app purchase ever.

    • Re:A new record (Score:5, Funny)

      by Anonymous Coward on Tuesday November 03, 2015 @09:07PM (#50860635)

      How I imagine it came about:

      Exec 1: "With the amount of money my wife/kid dumps into those mobile games I bet I could have bought the company by now"
      Exec 2: "You know that's a really good idea; we should just buy them"

  • I'm I the only one (Score:3)

    by rsilvergun ( 571051 ) on Tuesday November 03, 2015 @09:39PM (#50860771)
    who finds the constant buyouts and mergers disturbing? It seems like everytime I turn around there's another mega merger. Hell, the only thing that's stopping the Cable companies from merging is the FCC. Where are companies getting all this money to go on buying sprees like this? What happened to internal R&D? Remember Bell Labs? Why bother innovating when you can just buy the survivors? Thing is, R&D is expensive. So instead of great new games we get cheap, highly addictive and manipulative stuff like Candy Crush...

  • Crushed it (Score:5, Informative)

    by PopeRatzo ( 965947 ) on Tuesday November 03, 2015 @10:04PM (#50860857) Journal

    Activision paid over $1billion more for Candy Crush than Disney paid for the Star Wars franchise.

    • Re:Crushed it (Score:5, Insightful)

      by cfalcon ( 779563 ) on Tuesday November 03, 2015 @11:34PM (#50861105)

      They didn't just buy Candy Crush though, they bought a whole company.

      • Re:Crushed it (Score:4, Insightful)

        by JaredOfEuropa ( 526365 ) on Wednesday November 04, 2015 @06:22AM (#50862019) Journal
        The company and the game itself (source code) are worth bupkis. It would be trivially easy for any developer worth their salt to duplicate the game, and King aren't exactly a paragon of innovative game development. They scored a hit and managed to capitalize on it; as others have explained here, their other games are derivative, some better than others, but they are mostly successful because they can plug the hell out of those other games in the already popular Candy Crush. What Activision are buying is the IP and the eyeballs; if all of King's employees quit after setting fire to the office and burning the only backup of the game's source code, Activition won't have lost much.

    • It's also the same ballpark figure that Oracle paid for Sun Microsystems. Pure insanity.

  • I dont' understand how Candy Crush makes money. Does anyone know?

    • The basic way to make money is to tap into stupid. Candy Crush simply hit a vein.

    • Re: (Score:3)

      by tlhIngan ( 30335 )

      I dont' understand how Candy Crush makes money. Does anyone know?

      Given the hours people put in it, it's easy.

      Ads and in-app upgrades.

      Ads are obvious - with the hours people put in it, you can make a lot of money showing ads to players.

      The second way is in-app purchases. Like all addictive games, your plays are limited - you can only make so many moves or play so long before you have to stop. But if you can spend $1 to play unlimited for a day or week, that easily rakes in cash.

  • You assholes gave Candy Crush $1.33 B? You suck!

  • Activision needs new revenue streams (Score:4, Informative)

    by RogueyWon ( 735973 ) on Wednesday November 04, 2015 @05:58AM (#50861969) Journal

    Personally, I'm of the view that Activision has just paid rather too much money to acquire a developer whose value has already passed its peak. A lot of these mobile developers tend to get big on the basis of one or two apps that "go viral" but then struggle to follow up on initial successes. The mobile gaming market is so over-crowded that producing the next big-hit is a complete crapshoot. Nobody's come up with a formula that works; the Next Big Thing is as likely to be a so-bad-it's-funny Flappy Bird game from some guy in his bedroom as it is to be a carefully crafted and marketed sequel to the Last Big Thing.

    That said, I'm not surprised that Activision is looking to diversify. For a long time, it has been dependant upon two big cash cows; World of Warcraft and Call of Duty. Both of those have passed their peak.

    World of Warcraft's subscriber numbers have fallen a long way since their peak in the late-Lich King/early Cataclysm era. It's down at around 5 million subscribers now, down from a peak of over 12 million (and Activision/Blizzard have just announced they're going to stop reporting subscriber numbers). 5 million is still a huge user-base for a subscriber-MMO, but they are on a fast downward trend and likely to lose the "world's biggest subscriber MMO" crown soon.

    Call of Duty, meanwhile, has also fallen a long way from its sales peak. The peak was achieved in 2011, with 26.5 million sales of Modern Warfare 3. 2012's Black Ops 2 managed an only-slightly-lower 24.4 million, but things went into serious decline after that. 2013's Ghosts sold 16.5 million copies, which Activision blamed at the time on the game coming out during a transition in console generations (the fact that it was a poor game even by Call of Duty standards probably didn't help either). It never reported final numbers for 2014's Advanced Warfare, but did indicate that after 3 months on sale, numbers were "27% lower than Ghosts at a similar point in time", which would indicate that it probably eventually landed somewhere in the 12-13 million sales range.

    Now, don't get me wrong, both World of Warcraft and Call of Duty are still spectacularly successful franchises (breaking over 10 million sales is something most AAA developers can only dream of, let along over 20 million). But they are far and away the most important jewels in Activision's crown and if they are in decline, that gives the company a problem.

    On that basis, it's not surprising to see them take a punt on something like King (even though I think this was the wrong punt to take).

    • Re: (Score:1)

      by samos69 ( 977266 )

      Activision just announced that the Destiny subscriber base is over 25 million IIRC and they have expanded paid DLCs by adding microtransactions for cosmetic items. Lots of life left in its projected 10 year life span (despite the critics claiming its a flop)

  • There is a suspicion that Activision are doing this to move their corporate headquarters to Ireland. King is already in Ireland and the size of the acquisition could mean Activision would headquarter there and benefit from lower corporate taxes. It'll probably save them billions. Good for Ireland, not so good for the US.

    Of course they might be doing it because of Candy Crush but I suspect King is grossly overvalued and Activision know it - but again, tax inversion.

    • If they're doing this so they can pull off an inversion, that make so much more sense. The purchase at all, the size of the deal, etc.
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