The world of casual games has changed a lot in the past few years. While not long ago companies like PopCap and Yahoo! Games ruled the marketplace, today the landscape is dominated by companies like Zynga and King. But, while Zynga has had trouble keeping on top, losing that position to King in 2013, the latter has continued to see successes. In fact, 2014 saw $1.4 billion in revenue from their Candy Crush franchise.
In 2009, Electronic Arts saw the writing on the wall and purchased Playfish for $300 million, and PopCap 2 years later for $750 million (base). 2 years later, though, EA shut down Playfish, upsetting many with the loss of games like SimCity Social. While many saw this as an attempt by EA to exit the casual space, it actually turned out that they were attempting to focus their efforts into the more popular and profitable PopCap.
In an attempt to compete with the more established EA in the social marketplace, Activision Blizzard announced this week that they have acquired King Digital for an astounding $5.9 billion. Activision Blizzard CEO Bobby Kotick said of the acquisition,
The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment. With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before.
Riccardo, Sebastian, and Stephane are some of the best minds in the business, and we have long-admired King for consistently creating incredibly fun, deeply engaging free-to-play games that capture the imaginations of players across ages and demographics. Activision Blizzard will provide King with experience, support and investment to continue to build on their tremendous legacy and reach new potential. We share an unwavering commitment to attracting and developing the best talent in the business, and we are excited about what we will be able to accomplish together.
King CEO Riccardo Zacconi added,
We are excited to be entering into this Acquisition with Activision Blizzard. Since 2003, we have built one of the largest player networks on mobile and Facebook, with 474 million monthly active users in the third quarter 2015, and our talented team has created some of the most successful mobile game franchises. We believe that the Acquisition will position us very well for the next phase of our company's evolution and will bring clear benefits to our players and employees. We will combine our expertise in mobile and free-to-play with Activision Blizzard's world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide. We are very much looking forward to working with Activision Blizzard. We have two teams that, together, will have an amazing footprint, innovative technology, and leadership across platforms, and unique, established IPs to delight one of the largest networks of players in the world.
What will this newly combined company be able to accomplish? There is no real telling, but they are adding a group of incredibly talented developers, designers and game creators to the family. Perhaps it will breathe some creative life into the company - something that is desperately needed as they trudge down the road of annual iterations as opposed to creating new, exciting content.
What do you think? Is this massive purchase good for Activision and King? Let us know in the comments.