Nov 08, 2015 11:14 AM EST
Not so Sweet Deal: Candy Crush Bought by Activision Blizzard for $5.9B

The Kind Digital Entertainment announced last Tuesday that the London and Stockholm-based makers of Candy Crush Saga had been bought by California-based Activision Blizzard Inc., a video-game-making company that is behind World of Warcraft and Call of Duty.

Activision's step in buying the mobile game is part of the company's steps "to capitalize on growing smartphone-based play," Bloomberg reports. "Now is the right time to enter mobile gaming," Activision Chief Executive Officer Bobby Kotick said.

In an article published in Independent, Donald MacInnes stated that Activision Blizzard made a risky step in buying Candy Crush given that 80 percent of the players are female. The males are more into their already established PC games Call of Duty and World of Warcraft. He said that games do not make it long. He reminded people about the Great North American Video Game Crash which happened between 1983 and 1985. 

The deal worth $5.9 billion is said to will save taxes at the same give access to the fast-growing mobile gaming industry. The acquisition includes a $3.6 billion worth of cash stored outside the U.S. Doing this will save about $1 billion in taxes.

While the developer scored big with Although Candy Crush developer was scoring big with his game's success, it was hard for him "to create a successor to that blockbuster." With that, they decided to make the big step. "It's the next step...It opens up opportunities we didn't have before," CEO Riccardo Zacconi, co-founder of King said.

Chris Hickey, an analyst at Atlantic Equisites LLP, says that Activision "looked over and saw King at a pretty reasonable valuation and saw this is a fast-track way of accelerating their own mobile strategy." He added that "the tax maneuver is a fantastic move and is in a way one of the highlights of the deal."

Candy Crush is a free game that can be played both on smartphones and Facebook. However, the game has features that are not readily available. In order to have these added features, one has to shell out money.

King will still be run by Zacconi. This time, it would be considered as an independent unit of Activision until the deal is completed by spring of next year.

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