King may focus on Blizzard Franchises in the future
Tuesday, 24 May 2016
“Now as part of the Activision business family, beyond existing plans, we have now new opportunities to create even greater games for our massive player network by combining Activision Blizzard's top-performing IPs on console and PC with our mobile expertise,” King CEO & Executive Director Riccardo Zacconi said during an earnings call. “The deal, as you know, closed two months ago and we have started conversations with both Activision and Blizzard to explore those opportunities.”
King was acquired by Activision Blizzard for $5.8 billion, paid for with $3.5 billion of internationally held cash and $2.3 billion of new debt according to the aforementioned earnings call. The actual list price Activision Blizzard paid for King was closer to $4.7 billion however, as King’s cash assets totaled about $1.15 billion.
In exchange, Activision Blizzard got King’s network of 463 million global players, a 572 percent increase from the 81 million players Activision Blizzard had before. This matters, because including King on their balance sheet meant a 80 percent increase in year-to-year quarterly revenue coming from selling in-game content. This means that King’s freemium magic brought in $285 million revenue during the March 2016 quarter.
So what would King’s mobile-focused spin on iconic franchises such as Diablo , Call of Duty and Starcraft look like exactly? Pretty much the same strategy King struck gold with Candy Crush Saga, and Blizzard with World of Warcraft: maintenance designed to make an old game feel alive, with in-game third-party advertising looking like the cash cow to success.
“We do believe that advertising could be a meaningful revenue stream for King in the long term. We have 463 million monthly active users, and with that it's one of the largest untapped audiences for advertisers in the world. But it's early days and we've just begun experimenting with [in-game third-party advertising],” said Zacconi during the earnings call. “I want to say that first and foremost we are focused on retaining our players and we are focused on providing a great player experience and we will not compromise on this point.”
This means continuously new downloadable content, live game operations, extensions for older games and sister/sequel franchise titles to create a paracosm.
All three Candy Crush Saga games were included in the top 15 grossing games in the United States this past quarter as well, and considering that the original Candy Crush Saga came out about four years ago, that’s nothing to scoff at.
King is planning to release two non-Candy Crush Saga related games this year, one during the summer and another during the fall, so make sure to keep an eye on iDigitalTimes’ mobile games coverage.