Support NeoGAF

[CaviarMeths]

thanks for putting this deal into perspective. Just insane.

To put it in even more perspective, it wasn't just Star Wars. It was Lucasfilm (so Indy Jones a few other things too), Industrial Light & Magic (one of the most in-demand effects studios in the world), and Skywalker Sound.

Also, Star Wars toys and merchandise have generated something stupid like $25bil in revenue in the last 38 years and will probably generate another $25bil in the next 38 years.

So yeah, $4bil for that.

 

[TwiztidElf]

This does not affect my already existing personal embargo on Activision games.

Bizarre Creations. Never forget.

 

[Majukun]

call of duty saga in 2016

 

[Ambitious]

I guess a Destiny version with engrams instead of candies is inevitable.

 

[MatrixMan.EXE]

Didn't even realise Activision Blizzard had that kind of money to blow.

 

[Kill3r7]

Good deal for King.

 

[Jacknapes]

That is certainly surprising to say the least, right out of nowhere.

 

[BibiMaghoo]

I would think that is considerably over priced. Yes they have huge revenue and users, but they are a fickle base, and could drop to nothing practically overnight. It only takes one game to pull them all away, and then Acti are left with some average to poor mobile games that did once make money.

It will be interesting to see what happens, but I wager they try and sell them off before long.

 

[Cripshay]

5.9 billion.... Jesus Christ. If you think about it, it's so easy to make money. You 'just' need the right idea. Man...

 

[Phat Michael]

This does not affect my already existing personal embargo on Activision games.

Bizarre Creations. Never forget.

I reckon your boycott is the last thing they think about before bed each night.

 

[SolidusDave]

You would think those 6 billions could be better spend on having insane marketing budgets to enforce the popularity of a random mobile game by them every few years. Have a few superbowl spots and shove it down people's throats.

How does buying King ensure that the completely uninformed user base won't switch to another mini game that happened to grasp their co-workers and friends? Or that King would be able to produce a few more hits that attracts their revenue whales? The fate of these kind of games certainly does not depend on the quality of the game or some other highly skilled expertise Activation would need to acquire.

 

[virtualS]

Timing is everything. Get out while there are still enthusiastic morons around willing to pay top dollar.

 

[newtypepilot]

WTF 5.9B......

I thought the whole candy crush fad peaked already, hasn't it? Aren't they a one hit wonder like Rovio with their Angry Birds? I know the game has a lot of whales but they definitely overpayed.

 

[daxter01]

why haven't they make temple run style game with Crash Bandicoot already?

 

[Hanmik]

 

[QaaQer]

King has come close to perfecting camouflaged gambling mechanics in addictive colorful packages. They reach people who would never spin a slot or drop chips on a blackjack table; and the manipulation is subtle enough that most do not notice. Yes they will notice the credit card charges, but they won't see it in the same light as video lottery terminals, even though they should. So they blame themselves.

Being able to peddle an addictive product is very profitable and very valuable. For example, Japan's 2013 Pachinko revenues were $175 billion USD (19 trillion yen). That is for ONE year and is twice as big as world wide revenue from all types of videogames, including mobile. So why is King worth more than star wars and Minecraft? Neither of those uses gambling mechanics to generate revenue.

Side note: Maybe someone should clue people in that children exposed to gambling mechanics have an increased risk of addiction later in life. Giving kids addictive products is always a bad idea, even if they don't buy mtxs.

 

[bomma_man]

King has come close to perfecting camouflaged gambling mechanics in addictive colorful packages. They reach people who would never spin a slot or drop chips on a blackjack table; and the manipulation is subtle enough that most do not notice. Yes they will notice the credit card charges, but they won't see it in the same light as video lottery terminals, even though they should. So they blame themselves.

Being able to peddle an addictive product is very profitable and very valuable. For example, Japan's 2013 Pachinko revenues were $175 billion USD (19 trillion yen). That is for ONE year and is twice as big as world wide revenue from all types of videogames, including mobile. So why is King worth more than star wars and Minecraft? Neither of those uses gambling mechanics to generate revenue.

Side note: Maybe someone should clue people in that children exposed to gambling mechanics have an increased risk of addiction later in life. Giving kids addictive products is always a bad idea, even if they don't buy mtxs.

sounds like there's "sovereign risk" to this deal then. I wouldn't be surprised if regulation makes a move in this area within the next few years.

 

[Spiritwalker]

what will they do when the fad ends? when the bubble bursts?

they may come to regret this purchase.

 

[QaaQer]

sounds like there's "sovereign risk" to this deal then. I wouldn't be surprised if regulation makes a move in this area within the next few years.

I hope so , it is just with games like CC, the rng is the puzzle board and not the power ups. Regulating more strait forward gacha spin the wheel thimgs like ultimate team paks through the esrb, that I can see. CC hides theirs.

 

[Pie and Beans]

Nonsense level of money for a bubble, but Acti does these sort of things to remain looking like the alpha dog of the industry; indestructible and fierce. "6 bill? Yeah, no probs, aint nothing we cant buy into."

Acti therefore probably preferred to overpay a little just to illustrate how big their dick is. Which must be depressing if you ever worked for them and couldnt get a budget greenlight before you were folded into making map packs like everyone else.

 

[mnz]

Nonsense level of money for a bubble, but Acti does these sort of things to remain looking like the alpha dog of the industry; indestructible and fierce. "6 bill? Yeah, no probs, aint nothing we cant buy into."

Acti therefore probably preferred to overpay a little just to illustrate how big their dick is. Which must be depressing if you ever worked for them and couldnt get a budget greenlight before you were folded into making map packs like everyone else.

Do you really think companies work that way?

 

[Lord Panda]

Holy shit. What a stupid waste of money.

 

[Kinyou]

sounds like there's "sovereign risk" to this deal then. I wouldn't be surprised if regulation makes a move in this area within the next few years.

With this kind of money in play there will probably be a bunch of lobbyists to fight off.

 

[ConceptX]

Maybe I'm misinformed, but I thought King was on a downturn with investors/public disappointed in "Candy Crush Soda" they didn't believe King could land another hit and sustain growth? And expected to end up like Zynga in a few years?

Seems like a giant waste of money, but I'm basing this on my likely wrong assumption.

It's one way to get into the mobile market though, skip the bullshit and buy the...king....

 

[Cromat]

I think this is an important point:

The $5.9bn all-cash transaction represents a 25 per cent premium to King’s valuation at Monday’s close, but the $18-per-share price is below the $22.50 level at which King went public on the New York Stock Exchange last year.

Basically, King was bought at a 20% discount over the IPO valuation. I don't think it's too outrageous for 300 million unique active users, especially since Activision Blizzard has been fairly absent in the mobile market (aside from Hearthstone).

 

[Acquiescence]

That is an insane sum of money. In what way was it worth spending that amount, to own the rights to Candy Crush? It's not exactly an IP that's on the rise these days.

Strikes me as a bizarre business decision, but eh, what do I know.

 

[Azzawon]

This is stupid, but we are talking about Activision here. I'm not massively surprised, I'm just disappointed.

 

[Styles]

That is a lot of money.

 

[JonnyDBrit]

I'm gonna guess there was almost certainly the idea of having Activision IPs (such as Skylanders - if not especially Skylanders) in the form and with the platform recognition of King's games. Fallout and Sonic have already proven that the IPs of more traditional games can use their familiarity to draw in mobile users, so its not really surprising that Activision might think they could have similar success with the sheer range of properties they own. And even if they don't do quite so well at first, they can coast on the money that CCS and others are still gonna make for a while, even if CCS itself is on the downturn.

 

[ramparter]

I hoped it would be the other way around.

 

[Apt101]

The soundtrack to all of my dumps for a good month was the tune of Candy Crush. Now it's Hearthstone. Sometimes I wish the game had chat so I could write "sorry have to bail, done pooping".

 

[Phat Michael]

Nonsense level of money for a bubble, but Acti does these sort of things to remain looking like the alpha dog of the industry; indestructible and fierce. "6 bill? Yeah, no probs, aint nothing we cant buy into."

Acti therefore probably preferred to overpay a little just to illustrate how big their dick is. Which must be depressing if you ever worked for them and couldnt get a budget greenlight before you were folded into making map packs like everyone else.

Do you really think companies work that way?

LOL exactly.

Ive noticed people here kneejerk reactions like "What a waste of money!" or "Could have invested that in some new games!"

Not realising this multi billion dollar company will have panels of qualified experts who do valuations and due diligence all day long. This deal would have been the result of months of research (if not more) and simulations/financial projections which show they can turn a profit after a certain amount of time.

People said the same about minecraft - what a waste, one trick pony blah blah. These investment/buy-out threads are just embarrassing to read through.

 

[DJKhaled]

I can't wait for Assassin's Creed Candy Crush edition.

Umm I don't think you know what games Activision make

 

[RPGCrazied]

Why?

And 6 billion for candy crush? Seems like a waste of money.

 

[cruise]

This is really bad news for gamers, as I really don't see this ending up being a good deal at all for activision (they overpaid like crazy, to hell with what the IPO valuation or whatever says, it's more like over-valuation). This is gonna make activision's shareholders more nervous in due time, and therefore they'll be more desperate to take Microsoft money than PlayStation install base. I don't see this ending well at all.

 

[lilltias]

Yeah, Lucas more or less gifted Star Wars to Disney. He wanted it to be in stable hands and with people who could keep it a premium franchise. That pretty much leaves Disney. And he didn't do it for money. 4 billion dollars for Star Wars is nothing, it was symbolic. That money will come back in spades on toys alone. It is probably already a net win for Disney. So the comparison is a bit off.

 

[Apt101]

Yeah, Lucas more or less gifted Star Wars to Disney. He wanted it to be in stable hands and with people who could keep it a premium franchise. That pretty much leaves Disney. And he didn't do it for money. 4 billion dollars for Star Wars is nothing, it was symbolic. That money will come back in spades on toys alone. It is probably already a net win for Disney. So the comparison is a bit off.

Yea, I remember it being a big deal in the news at the time and I thought "Lucas could have gotten two to three times that amount from some random international investment conglomerate". He was already so rich it was his way of placing it competent hands while giving away 4 billion to charity. He probably earns more in interest from some forgotten savings account than all of us combined in a year.

 

[More_Badass]

This is really bad news for gamers, as I really don't see this ending up being a good deal at all for activision (they overpaid like crazy, to hell with what the IPO valuation or whatever says, it's more like over-valuation). This is gonna make activision's shareholders more nervous in due time, and therefore they'll be more desperate to take Microsoft money than PlayStation install base. I don't see this ending well at all.

Yes, let's ignore the known data and make baseless assumptions

You might dislike it, but absorbing a company with an already existing audience and an already established foundation in the market is a smart move. Considering even Nintendo of all companies is getting into mobile, you can't blame Activision for wanting a stronger foothold on that platform.

 

[Chariot]

LOL exactly.

Ive noticed people here kneejerk reactions like "What a waste of money!" or "Could have invested that in some new games!"

Not realising this multi billion dollar company will have panels of qualified experts who do valuations and due diligence all day long. This deal would have been the result of months of research (if not more) and simulations/financial projections which show they can turn a profit after a certain amount of time.

People said the same about minecraft - what a waste, one trick pony blah blah. These investment/buy-out threads are just embarrassing to read through.

One would think so and yet companies wreck all the time after aquisitions. Or even without wrecking, investments can turn into mud.

Of course lack information, but you can think experts can't be wrong.

 

[Vilam]

I just don't see the value in buying these mobile developers for huge sums of money. The market is so fleeting... One day you're popular, the next day you're forgotten. Just spend a miniscule fraction of that money to poach some talent and develop something in house until you hit it big.

 

[Triggerhappytel]

My wife hates gaming with a passions, thinks console gaming is a waste, yet she will happily spend 4 hours a night playing this game.... tells you everything

Yes, my sister is the same. She has no interest in traditional gaming whatsoever, but loves Candy Crush. She lives abroad and when she visited her earlier this year I was surprised at how often she mentioned it, or dropped it into unrelated conversations.

Paying more for King than Disney paid for Lucasfilm. Hilarious.

Yeah, when you put it like this it's kinda crazy.

On the other hand, Star Wars ip has always been a license to print money through merchandising.

The big difference is that Star Wars is sustainable. It's been relevant for almost 40 years with no signs of slowing down. Although it requires a huge investment to make a new Star Wars film (two or three hundred million dollars, compared to probably two or three million dollars to make a new Facebook/browser game), Disney will make an absolute fortune through merchandise and that will sustain for years. Most mobile games don't remain relevant for more than a few years, so it remains to be seen whether this will turn out to be a good long-term investment for Activision.

 

[Guileless]

sounds like there's "sovereign risk" to this deal then. I wouldn't be surprised if regulation makes a move in this area within the next few years.

Not sure about other places, but in the US, the availability of gambling has increased a lot in recent years with more states legalizing it. Maybe some politicians will see value in making it an issue as to children, but I would be surprised if anything happens to affect bottom lines of companies.

When I saw my son playing these mobile games with gambling mechanics on my special lady's iPad, I started putting it where he can't get to it and got him a Vita to play real games on.

Edit: I also deleted the iPad version of Madden which had this shit and told him to play the console version. And no Ultimate Team allowed.

 

[CelticVegas]

Ok, now sell Crash Bandicoot to Sonyyy!

 

[LOCK]

Seems like a good investment.

It's the valuation that is confusing to people but this is a company making profit and in the process of diversifying.

 

[hesido]

That's some whale to be able to pay that.

 

[Monocle]

This world, man. I wonder if we'll ever reach a point where we as a society value quality and depth in our entertainment over trivial short-term satisfaction.

 

[Visualante2]

They overpaid

Edit. imo

 

[Crema]

I just don't see the value in buying these mobile developers for huge sums of money. The market is so fleeting... One day you're popular, the next day you're forgotten..

Once again I'm curious to know how true this actually is. Candy Crush Saga was released in April 2012 and is still grossing very well in 2015. None of the games topping the charts of the dedicated market released in 2012 are still doing well today. If anything it is the console market that relies on fads and sales driven by marketing and 'hype'. It's not a bad thing, but it seems a bizarre criticism to make of mobile games when their capacity for significant profits over the long term is actually much higher.

I've also noticed people mention how fickle mobile users are with no loyalty to publishers. Anecdotally I'm not really seeing that. Looking through the top grossing apps the same publishers seem to keep coming up. King, Playtika, Supercell, GREE, BigFish, Zynga, EA. There is definitely still room for new companies to come in and do well but the established companies seem to have some success with releasing multiple titles. This is what you'd expect of a growing healthy market. I think the fact that the console market hasn't had any new players for so long makes us forget how normal markets behave.

 

[Skellig Gra]

They bought it way too late IMO.

 

[7DollarHagane]

King has come close to perfecting camouflaged gambling mechanics in addictive colorful packages. They reach people who would never spin a slot or drop chips on a blackjack table; and the manipulation is subtle enough that most do not notice. Yes they will notice the credit card charges, but they won't see it in the same light as video lottery terminals, even though they should. So they blame themselves.

Being able to peddle an addictive product is very profitable and very valuable. For example, Japan's 2013 Pachinko revenues were $175 billion USD (19 trillion yen). That is for ONE year and is twice as big as world wide revenue from all types of videogames, including mobile. So why is King worth more than star wars and Minecraft? Neither of those uses gambling mechanics to generate revenue.

Side note: Maybe someone should clue people in that children exposed to gambling mechanics have an increased risk of addiction later in life. Giving kids addictive products is always a bad idea, even if they don't buy mtxs.

If the government ever cracks down on this stuff the mobile market will change drastically.

Where are the TV news stories vilifying these companies as the bedfellows of the gambling and casino industry that they are? Where are the senators up in arms about the psychological exploitation hard at work?

It's because its too hard to quantify. You can't play video of the pastel and saccharine candy crush on TV and expect people to get upset like they do at a clip of doom or mortal kombat or sex in mass effect.

This side of the mobile market really has very little to do with "gameplay" as we know it and has much more in common with slot machines from a design perspective.

I wish some governor would make it their platform to legislate and control this industry better and put some kind of cap on spending per device per month across all games.

There is no reason any one person needs to spend over $500 in one month on any number of mobile games. I think you could say that anything above that is exploitative and if the app cannot provide a month's worth of entertainment for $500 it should not exist.

I wonder how much supercell, king, and the others paid kanye to stop his comments about mobile games? You know they were sweating that day. They can't have the masses being exposed to the big scam that's making their fortunes.