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What Newzoo, App Annie and IHS think about Activision Blizzard's $5.9 billion King deal

What Newzoo, App Annie and IHS think about Activision Blizzard's $5.9 billion King deal

With a big deal like Activision Blizzard's $5.9 billion purchase of King, everyone wants to voice their opinion.

Market intelligence company Newzoo is positive on the deal, noting the combined companies would have posted H1 2015 revenues of $3.4 billion.

That makes Activision Blizzard King the second biggest game company in the world, behind Chinese giant Tencent.

"People who think the $5.9 billion valuation is too high are wrong," comments its CEO Peter Warman.

"One key value element is a complementary pipeline in terms of games in development. In addition to its Saga series, King has been rumored to be working on several mid-core games that will soon see daylight.

"I am certain Activision Blizzard has taken this into account in the valuation.

"Having King's experience in running and monetizing mobile games as a service will be a priceless asset to a company that is still on the learning curve when it comes to mobile."

The pressure

Piers Harding-Rolls, Head of Games at IHS is more considered, however.

Pointing to both the relative decline of Call of Duty and increased competition for Skylanders, he says the move could be seen as defensive for Activision Blizzard, which is coming under shareholder pressure to get properly into mobile.

"Activision's strategic move enables it to tap enormous scale of the mobile games market and overnight seize a significant double digit share of mobile game," he says.

"King will allow Activision access to mobile and tablet platforms and its operational and monetisation expertise, a much broader global and female-heavy audience and a new portfolio of casual gaming content."

With King's audience stagnating ... maintaining the scale of the business will be the key challenge for the next 6-12 months.
Piers Harding-Rolls

Yet, given the decline of Candy Crush Saga, he says King faces an uphill challenge maintaining its commercial scale, even with new games coming to market.

"The mobile games market is highly unpredictable, even with a strong set of franchises success and strong IP brands," he adds.

"With King's audience stagnating as Candy Crush Saga declines, maintaining the scale of the business will be the key challenge for the next 6-12 months."

Longterm play

Meanwhile, app store intelligence outfit App Annie looks to the longterm potential for Activision Blizzard.

"Activision has taken in the past a more reserved approach to mobile," says VP Marketing Communications & Community, Fabien Nicolas.

"In the meantime, global competitors such as EA or Tencent have embraced this new sector."

In the short-term, he cautions that "the opportunities to leverage Activision IPs seems limited given the core gameplay of King's main games".

Yet, overall, he's hopeful.

"We can imagine the long term potential of teams experts at building accessible mobile experiences enjoyed by millions and teams experts at crafting rich universes and storylines at Blizzard."


Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

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