A shock announcement from November 2015 was that Activision Blizzard is to acquire mobile company King.com.
And even more eye-opening was that the Call of Duty publisher is spending $5.9bn to buy the Candy Crush maker.
Just to put that into perspective: Disney purchased the Star Wars franchise from LucasFilm for $4.06 billion in 2012, while at the end of 2014 Microsoft shelled out $2.5 billion for Mojang and its blockbuster Minecraft franchise.
So the sheer amount that Activision was willing to spend for King - quite understandably – raised a few eyebrows.
“It is exciting, of course,” King’s SVP of Candy Crush Tjodolf Sommestad says.
“It proves that we have come a long way in building a strong business that can attract interest from a company like Activision Blizzard.”
"Our ambition is to reduce King’s
reliance on the original Candy Crush Saga."
Tjodolf Sommestad, King
The Call of Duty publisher has said that buying King would help increase its presence in mobile. And King is – on the surface – a very attractive company in this sector.
Along with Supercell (Clash of Clans and Boom Beach), Rovio (Angry Birds) and Machine Zone (Game of War and Mobile Strike), King is one of the headline names in the billion-dollar mobile games scene.
Its expertise in this sector will surely help a traditional publisher like Activision, who is yet to make a splash in the mobile games market (the company closed its mobile studio, The Blast Furnace, in March 2014).
In addition, King has a sizeable player base: its latest financial results places the company’s total monthly active users at 474m.
However, the company’s last few financial reports have featured declines in both revenue and users.
King blamed this on the maturation of its flagship Candy Crush Saga game as fewer players spend money on the title. But this isn’t a concern for Sommestad.
“The Candy Crush franchise is in a good position,” he insists.
“Our strategy is to have a strong series and build a strong network of pillars. We had an ambition to reduce our reliance on the original Candy Crush game. In 2015, we had a good year following the launch of 2014’s Candy Crush Soda Saga.
“Now we are launching Jelly Saga, which is Candy Crush’s second sister title and the third game in the family for the franchise. And we believe and hope that our players will enjoy that, too. In terms of monetisation, there are many factors in there and part of our focus is trying to retain our players in our games and in our network.”
In Q3 last year, 60 per cent of King’s gross bookings came from non-Candy Crush games – a 14 per cent rise year-on-year. The firm is launching other titles to help support that growth. Though replicating the success of the original Candy Crush Saga is a concern for the team.
“It’s a challenge for any company to bring hits to the market,” Sommestad admits.
“Replicating a hit can also be really difficult. Our strategy here is to build a strong franchise and build a network. Candy Crush Saga now makes up 40 per cent of our gross bookings, which means we have 60 per cent coming from other games, and we are still a very profitable company.
“And we not only have the Candy Crush franchise, where we are launching a new sister title, we also have other franchises like Farm Heroes Saga and Pet Rescue Saga that are high up in the grossing charts. It’s clearly a challenge, and I think we have been humble before that challenge in what we have been doing. I believe our strategy is the right one.”
The latest entry in the firm’s Candy Crush franchise is Jelly Saga, which Sommestad claims mixes up the tried and tested Candy Crush match-three formula. The new title features boss fights against AI characters, which Sommestad says: “is an interesting twist that adds a more competitive element to the game, which is something that we knew that our players have been looking for.”
But, while certainly slightly different, it hardly feels like Jelly Saga reinvents the wheel. And many of King’s games – including Farm Heroes and Pet Rescue – are cut from the same match-three cloth. Is true innovation a challenge for King?
“We have lots of ideas and there are so many things that we want to bring to the market,” Sommestad insists.
“We have to make sure we pick the right one. When developing a game like Jelly Saga, and similarly when we were working on the Soda Saga game, we need to find the right balance between giving players something that they would recognise. There are so many millions and millions of people that have played our games before and have truly enjoyed them. We want them to feel that, yes, this is the Candy Crush game, it’s part of the Candy Crush family, but we also want to bring something new to those consumers that have been trying our other games. It is definitely something that we are working on and work hard to get right.”
"The mid-core is an area we are interested in.
We are now working on a title in that sector."
Tjodolf Sommestad, King
Up until now, the firm has been based entirely in the casual games space. But the firm has aspirations to enter the mobile mid-core market, currently dominated by companies like Supercell and Machine Zone. ‘Mid core’ refers to titles that sit between casual games like Candy Crush and core releases such as shooters. In other words, apps like Clash of Clans.
“As a company, we are now working on a mid-core title,” Sommestad says.
“It’s an area that we are interested in but we have nothing to announce at this point.”
King has the talent, knowledge and money to find that difficult second mobile smash hit. As Rovio and Supercell will tell you, that’s still no guarantee of success. But for King to justify that $5.9bn price tag, it’s important the company can replicate at least some of Candy Crush’s success.