Biz Daily: Why Activision Blizzard bought King

hello welcome to his daily I'm John Jordan so the big news today really is big news in a kind of shock announcement Activision Blizzard the big pc console publisher has announced that it's in the process of buying but if actually has bought King the developer games like candy crush saga for 5.9 billion dollars so be not some kind of speculation lots of opinion from various people about what this is a good deal and always going to yo yo yo I guess what we can say is the two companies are competing as complementary so Activision and Blizzard are focused very much on PC and console games very much focused on what we could say our kind of hardcore games all games that will appeal to a kind of

a teenage 23 year old male audience and also very focused on premium games so paid games contact end of ze tipton divide them up front but obviously world of warcraft is a subscription game so what packaging because it doesn't have a lot of its mobile it's been singularly disastrous really about from one of them have a good stab at making mobile game hasn't really got anywhere at all i mean you could argue hasn't really seen as it hasn't really spent money on patrol resources into making mobile games of success the one kind of kind of mobile game or partly mobile game has been very successful for TSM his heat ha stone from blizzard but that's a kind of a pc game that came to mobile not a pure-play mobile game but i think they blizzard well quite surprised about how well that game has done originally first looked on on ipad and since come to iphone as well so they've been come surprise by that

and that's perhaps as a mission of really have needed to any enthusiasm or any kind of an extra knowledge to know they need to get into mobile games that seems to be something that they could have looked entally because it got there was on on the games have been doing pretty well for them so compared to that King is pretty much pure played Red Vines a bit of facebook but mainly mobile is all free to play so that's a no paid games at all and is gender balance is a bit more focused on female getting a few month players which probably about 50 50 maybe 60 40 m in terms of her in favor of female players but one thinking has been proven breaker that is his do franchises obviously can't rush target is big game it's kind of dumb version to that candy crush soda so I'll guys done various kind of different silo stories before which engines on that and at a while or candy crush is by far away it's that kind of big franchise so that kind of reckon out to be to generate it kind of two three

four billion dollars in revenue during during this time the code one thing everyone's pointing out one because it's come power of Kings financials is that candy crush them that has been massive and is now in a relative decline so it's a mature product so that's been partly the issue the people of Musa as has Activision as a plate paid too much six billion dollars that seems like a lot of money and of course is a lot right but of Z with everything's depends what you're buying so both his companies are floated on the stock exchange so that makes it as I makes the evaluation process quite easy so Activision visit has paid remember about twenty percent and premium in terms of the share price of King before the deal once yet often down around twenty percent they're playing eighteen dollars per share I'm so in the terms of kind of it purely on it on a day-to-day basis has ever paid whatever pay for twenty percent if you

really want think into it if there are some kind of financial kind of intricacies so King has a set amount of cash which you could kind of take off off the valve for values of Isaiah about a hundred million dollars of cash there's also an issue that this is that L Activision Blizzard has a whole bunch of cash don't quite know how much but um the deal is actually all cash and it's paying about 3.2 billion dollars of his own cash and it's take bit of a loan from a bank to pay the rest off but a visit official Blizzard will have a whole bunch of cash that it will have outside the US and in terms of work and love us accounting laws but a fairly company if you're bringing cash in from outside you pay tax on that so it may be a slightly tax efficient way of doing the deal so so Activision Blizzard's may not be paying the whole kind of 5.9 billion dollars it made an accounting accounting kind of a method carries paying slightly less I mean it's kind of a punt but I guess the thing kind of em are you looking at it is

there's an obvious thing as its kind of complementary situation where these these two companies they're not competing in any way so so Activision visitors has gained really big market share in the mobile games market even if King isn't quite strong as it once was it still one of the strongest mobile games companies from ten and I and has a good global reach is also candy crush has been the professor here across the very around the world in in in China and Korea and Japan he's done pretty well in all ways good almost hurt wrist I'm so that's a good a good platform practices was it quite whether home no quite whether we expect you know King to be making call of duty games on mobile you could argue that while it's very good at free to play a monetization the engagement and games the service presence proven that it probably doesn't have misters never in its history made that made those kind of cool games home King has always been about very kind of

casual social experiences saying that it has over time have acquired some studios that a bit more kind of hardcore so so so maybe it's kind of gain expertise but you kind of imagine in the short term Alex we won't be expecting them call of duty saga to keep hearing on on on on any app stores so I guess if it becomes more for the dealing in the medium-term and long-term how do those two companies have the synergies work on setting possible for us to talent moment because it's the medium term and long term which have the crystal ball to be able to tell that but it seems it an open most people seem to suggest the deal is fairly positive and I guess the biggest impact really is how it shakes up the wider game space so it's always been interesting there's been some companies who have a very strong inside console pc at some rest on your mobile not that many companies are strong across the board and so with this deal activision

okay so calm Activision Blizzard King who becomes them but they are now be actually the second biggest games come in the world the biggest pure game store in the world for the biggest games the biggest kind of game to come into our is ten cent that has a lot of other parts to it to its own business but it's games revenues bigger than them Activision Blizzard kings but Tenzin it's very odd beast is some very very Chinese focused and in the west now actually and Blizzard King is now they've kind of the the biggest games company so you betta EA has very strong and console pcs mobile site is still very small so on that level woman case you have someone Japanese company square enix again conquest for long gone Console mobile has a bit not very much I'm Sega kind of similar a stronger global brand in Japan so it's quite a good play and whether you see is defensive or fencing the long term fact be in prison and they have

said that king will effectively operate as Blizzard does when Activision Blizzard effectively work as a independent business you that they all kind of run itself obviously they'll be synergy's and first up with either CEO remain in place in the management team will remain place so on it's only a really surprised kind of news story today very interesting to come speculator what will happen we don't really know for them Saudi people give us lots of food for thought in the coming days come back tomorrow can't promise the story as big as that one but I'm sure there will be something going on in the world of mobile gaming the roses see you then