How much is a userbase of 474 million worth? To Activision-Blizzard a heck of a lot, as it has announced its intent to purchase Candy Crush Saga developers King for $5.9 billion USD.
While previous high profile purchases of mobile developers such as EA’s purchase of Popcap or Zynga’s purchase of Draw Something creators OMGPop have not gone to plan, this move by Activision-Blizzard has also been called a tax saving deal by analysts at Bloomberg, with much of the price being paid in money held by Activision off shore, an amount that would be taxed for $1b USD should the company wish to bring those profits back to the United States.
Candy Crush Saga, King’s most successful product, is getting long in the tooth and facing quarter over quarter declines in revenue and player base, but it still reaches an audience bigger than Twitter and last year King made $2.1b USD in adjusted revenue. Between the reach of that game, the money it still makes and the tax savings this deal makes a lot of sense for Activision-Blizzard.
The purchase will be subject to approval by King shareholders and the Irish government (where King operates) but obstacles to the sale are unlikely. You can read the press release from Activision Blizzard here.