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Activision Blizzard purchases King.com (Candy Crush Saga) for $5.9 billion
- Thread starter GSR
- Start date
Agreed. The FT article I quoted said that contacts between Activision and King started three years ago.
Not to mention that you don't need to be a financial genius to see the logic behind this acquisition. All you need is one chart:
13% of Activision Blizzard's revenue comes from mobile and other sources, up from 5% last year. It makes perfect sense for an established company in the gaming industry to want to increase its activity in the fastest growing segment of the gaming market, especially when growth in their core console market is dwindling. One common way of doing this is through acquiring a major player in the growing market when conditions are right (e.g. when Activision has $3.6bn in cash and King is down 25% on its IPO valuation). This acquisition might not turn out well for a million different reasons, but to dismiss it as 'stupid' and 'a waste of money' is just ignoring the realities of the market and business common sense.
Triggerhappytel
Member
Lol. Minecraft is a phenomenon with a much deeper audience catchment than Candy Crush. That was a smart purchase. This... I'm not sure.
7DollarHagane
Banned
We will see. If this bubble bursts or legislation forces these companies to stop selling slot machines to people on their phone with guaranteed no return, or if somehow by some turn of fortune, people wise up and stop paying, king could drag down Activision with them.
Maybe I should be happier about this millstone Activision has taken on?
Nah, minecraft is still hot right now. Makes sense because they can potentially get that money back and then some.
Give War A Chance
Member
I didn't check every page, but I assume we've already seen Scrooge McDuck?
They must make so much money, daily. My goodness.
They must make so much money, daily. My goodness.
Don't quote me, but I thought i read somewhere that Kings only made several hundred million last year in profit. Doesn't look like a company worth 5 billion dollars.
thomasmahler
Member
Wait til Minecraft 2 launches exclusively on X1...
I'm guessing Blizz looked at the success of Hearthstone and thought it'd be smart to have a division that makes smaller games like that.
This only reflects how FANTASTIC that deal was for Disney. I remember there was an analysis from one of the big investment banks that said Lucasfilm's value was closer to $14bn.
Figures above $30bn is not uncommon when talking about the value of Star Wars.
Mechanized
Member
Well, if you can't figure out mobile might as well buy the competition.
jackissocool
Member
Why is Activision reporting at crazy times again? The acquisition?
Mobius and pet octopus
Member
LOL @ the people suggesting ATVI clearly doesn't know what they are doing
via https://twitter.com/CheapyD/status/661528251773382656
According to this chart their stock has risen by ~70% in the last year.
According to this chart their stock has risen by ~70% in the last year.
Yea, I think they wanted to have the call before the markets open today.
You would be right but for the fact that Minecraft continues to make loads of money.
This is ducking huge. Wow.
Acquisition announcement calls are normally pre or post market open/close. This one is pretty standard in terms of time.
Amazing how they shore up their biggest weakness like this so quickly.
16% premium. Seems cheap.
Activision blew out expectations. AD eps of 21 cents on revenues of 990mm vs consensus of 15 cents on revenues of 950. Wow huge beat.
Acquisition announcement calls are normally pre or post market open/close. This one is pretty standard in terms of time.
Amazing how they shore up their biggest weakness like this so quickly.
16% premium. Seems cheap.
Activision blew out expectations. AD eps of 21 cents on revenues of 990mm vs consensus of 15 cents on revenues of 950. Wow huge beat.
Chû Totoro
Member
Do you have real numbers by any chance? Only 2013 is not an estimation.
sixteen-bit
Member
That's a lot of money!
shinra-bansho
Member
I don't know where or how you guys come up with this stuff.
heh
maquiladora
Member
Things are worth what people are willing to pay for them. The market was willing to pay X yesterday for shares in King. Even at their depressed valuation, activision paid only 16% or so on top of that. I'd have to see if the stock ran up on rumors of a take over last week but seems like a good deal to me in terms of premium.
Obviously it's a rich multiple of earnings or EBITDA but welcome to software startups. Certainly does make mojang look cheap.
Obviously it's a rich multiple of earnings or EBITDA but welcome to software startups. Certainly does make mojang look cheap.
Nirolak http://www.neogaf.com/forum/showpost.php?p=184001831&postcount=202
Pretty sure I heard that right. Maybe change the title of the other thread?
Pretty sure I heard that right. Maybe change the title of the other thread?
Yeah, King is a well run company and market leader, pretty different thing.
House of Apps
Mass_Pincup
Banned
Hum no.
The whole point of buying King is to make more money, and as stated previously they only bought it at a 16% mark up.
Slayer-33
Liverpool-2
LOL @ the people suggesting ATVI clearly doesn't know what they are doing
via https://twitter.com/CheapyD/status/661528251773382656
According to this chart their stock has risen by ~70% in the last year.
I missed the first few slides
Fucking fuck.
Why didn't I buy Activision stock
trikster40
Member
I just think everyone at Activision got tired of spending their pay checks on Candy Crush so they just bought the company to get the perks for free
Chû Totoro;184000361 said:
Honestly I just googled "mobile gaming growth" and used the first image I found. I'm sure Activision at least has better data, but I might do some more thorough research when I'm back home. It's clear though that mobile gaming is the fastest growing market segment in gaming, if I remember correctly Capcom published similar projections in their investor's presentation.
I'll update after my meeting.
It sounds silly at first, but even if King is "on the way out" as some would like to say, I'm sure they'd pay for themselves over the years they have left. Which doesn't even consider the fact that they're not really on the way out and they'll probably remain healthy for a while.
I love that duck. Knowing that there's a giant duck traveling the world for no reason makes me happy.
I wonder how big King is? 5.9 billion could be a shitton of money for everyone involved if they decide to give some out to its employees.
Or the higher-ups, could be dicks and just leave with all of it, I guess.
shinra-bansho
Member
King is a publicly listed company. Its shareholders receive the cash from the takeover in exchange for their shares, (some senior management are also shareholders, I have no idea if they use an employee share scheme as part of their performance management).
The cash doesn't just go to management to distribute or abscond with as they see fit.
The cash doesn't just go to management to distribute or abscond with as they see fit.
Triggerhappytel
Member
Why not buy now? I'm sure Hearthstone and Heroes of the Storm will continue to grow, Overwatch will probably be huge and surely we're due more Diablo stuff soon - whether another expansion to D3, or even a brand new game. Destiny is only going to get more popular, and they'll probably streamline King and make it even more profitable. The only wildcards I'd say are Skylanders, WoW and COD - the latter two will remain huge obviously, but who knows if they will continue to decline, or whether BO3 will be the shot in the arm COD needs.
The Lamonster
Member
Wow. Hopefully somehow this translates into good news for Blizzard and Bungie games...increased budgets, some fun little mobile spinoffs...man I don't know
To be honest, Lucas could've likely gotten far more.
But he didn't care that much, likely. I mean, he's given every penny of that in charity...
That is a kingly (no pun intended) sum of cash for a mobile company..especially when with the track record of companies like Rovio and Zynga. I'm well aware of how much King has grossed in the past and how much they're projected to gross over the next couple of years, but mobile gamers have zero brand loyalty. Paying billions of dollars of a company that could go under if the next big mobile hit doesn't come from their studio is like playing Russian Roulette with your cash.
RodanCeros
Member
Well, this is awkward.
Triggerhappytel
Member
Well, this is awkward.
Ha ha. Activision won't be using that ad agency again!
FloweryMarston
Member
That's a bigger value than unsigned int max value.
wut? no, that's not how that works.
King was already way overvalued when they had their IPO and now this is just insane.
this sets a terrible precedent for other companies and this will backfire. huge waste of money.
Mihos
Gold Member
Nah, I am dumping mine now... before that new acquisition smell wears off.... buy it back in a few weeks once it corrects.
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