Activision Blizzard, owner of various video game franchises such as "Call of Duty," "Star Craft" and "Diablo," has just secured a deal to purchase "Candy Crush" developer King for $5.9 billion.
Although various analysts criticized the deal's value, Activision Blizzard believes it made the right move in order to reach a wider audience.
Shortly after news of the acquisition went public, analysts from various firms offered their insights regarding the deal. Some believe that King is not worth $5.9 billion primarily because primarily because it only focuses on the mobile games industry.
And, as noted by Cinemablend, the popularity and success of developers catering exclusively to the mobile platform tend to decline eventually. Studios such as Gamelab of "Diner Dash" and Dong Nguyen of "Flappy Birds" used to dominate the industry with the success of their respective games but soon faded after newer titles came out.
King and Rovio, the developer behind the "Angry Bird" games, seem to be the only studios to have found a stable foothold in the mobile game market. Despite this, analysts still think that Activision Blizzard's acquisition of King is a bit risky due to the limitations of the mobile industry.
"[Activision Blizzard] buying King is not something that we considered possible given [Activision Blizzard's] historical view of mobile and the types of deals that have been done in the space, as well as King's declining growth profile," analyst David Cole of DFC Intelligence said according to Gamasutra.
"We think that the King acquisition was clearly at a premium and goes against the trend of buying a company at their peak to buy market share," he added. "The track record for these type of acquisitions is not strong so it strikes us as expensive and risky."
Despite the criticisms of analysts, Activision Blizzard maintains its decision to take over King. According to the company, through industry status of the mobile game developer, it will be able to deliver more games to a wider audience.
"With mobile, we now have the opportunity to reach new players in 196 countries around the world and take a lot of that great content that we built over 35 years and create new content which will leverage against this new opportunity," Activision Blizzard said in a statement according to Cinemablend.
Analyst Peter Warman of the market research firm Newzoo sided with Activision Blizzard and said that the company did not overspend in the deal since King also have other titles that are still in development, Venture Beat reported.
In addition, the combined revenue of the two companies for the first half of this year is at $3.4 billion. This puts them ahead of other major game companies such as Microsoft, Sony and Electronic Arts, whose respective revenues are currently around $2.4 to $2.7 billion.
