Activision Blizzard completed the acquisition of King Digital Entertainment PLC, a game developer mostly known for a viral game hit Candy Crush Saga. The deal is worth $5.9 billion, and the bean counters at Activision Blizzard stated that they expect cumulative effect of $6.25 billion in annual revenue, and approximately $2 billion in operating income. Given that the company achieved $4.65 billion in revenue and $892 million in post-tax profit, this acquisition could pay off in a few years.
Overall, the company is hoping to break into the $25+ billion market cap, which should not be too difficult. What makes this deal important is the fact that the number of people that live in digital realms of ‘Activision Blizzard King’, if they were be a real country – would qualify ninth. With approximately half a billion users, playing multi-billion dollar franchises such as Call of Duty, Destiny, Guitar Hero, World of Warcraft and now – social games such as the Candy Crush Saga, Activision Blizzard is the largest gaming network in the world. And yes, it can take the heat to social media networks.
Our list of Digital and Real countries is getting mixed again, with another real world country getting close to dropping out of Top 10. This time, looser is Twitter, who with 305 million daily active users, and 320 million active accounts – can’t qualify for Top 10 anymore.
- 1.49 billion – Facebook
- 1.36 billion – China
- 1.25 billion – India
- 0.83 billion – QQ
- 0.81 billion – WhatsApp (owned by Facebook)
- 0.77 billion – Facebook Messenger
- 0.68 billion – QZone
- 0.55 billion – Weixin / WeChat
- 0.51 billion – Activision Blizzard
- 0.33 billion – United States of America
- 0.32 billion – Twitter
Given that in October 2015, the company acquired IPL Gaming Pro League, it will be interesting to see how rising markets of eSports, Virtual Reality and Augmented / Mixed Reality will drive juggernauts such as this one. Playing Guitar Hero Live on a VR headset such as the Oculus Rift or HTC Vive promises a completely new level of immersion for even the most casual, most mainstream user you could imagine. For example, if your grandma would get to relive the Woodstock Experience as Janice Joplin, or your grandpa chewing a bat on the stage (Ozzie Osborne), or playing the riffs of one and only Jimi Hendrix.
Then again, Call of Duty, Destiny or World of Warcraft / Starcraft / Overwatch in VR / AR might be risky plays, which is why an acquisition of King Digital makes perfect sense – to put a parallel with a car world, if you are BMW, you need to produce an Active Tourer 2 if you want to produce monsters such as BMW M4 GTS or M6. Then again, we believe Activision Blizzard will do just fine with expansion of its universes, such as an AAA Hollywood movie based on their Warcraft franchise:
