Last night, as I was finishing up a piece on how a mobile game had supplanted my love of a console franchise, news broke that Activision had made moves to acquire King, the developer best known for Candy Crush. For $5.9 BILLION dollars. I tweeted out two preliminary responses:
The first response was my Business Management degree kicking into immediate effect. Per their financial statement, King made over one and a quarter billions dollars in 2014. They grossed half a billion in the second quarter of 2015 alone. Based on those financials and the possible growing trend, Activision could make their money back in a few years. And that's not including the potential crossovers or what the two brands will learn from one another. Which leads into the second tweet...
Candy Crush has excelled at making the casual gamer willing to endure microtransactions. Activision will now have access to all of the research and metrics that King has been working with for years. They'll study the pain points of microtransactions as well as how to capitalize on bringing in new audiences when the existing one is continually phasing out. Imagine a Call of Duty where you get 10 free matches a day but have to charge your PSN or XBLA account a few bucks to play the rest of the day. Dancing emotes in Destiny are making them money now, but consider if the rumors from a few weeks back about being able to purchase consumables with the microtransaction currency became real. Yes. Some players would be outraged because that time that they put into getting exotic gear becomes a little less meaningful when other players can just pay for a better chance at getting those drops. But far more players would probably drop a few bucks for the chance to get a few new yellow engrams, providing Activision with extra cash on a game that people already paid for. People are spending money so they can do the Thriller dance in-game; of course they'll do it for a chance at the game's best weapons.
Once the new Call of Duty or Destiny 2 comes out, they can even move these games to free-to-play models in order to invite new gamers into the ecosystem. When somebody finally gets their Xbox One or PlayStation 4 in 2017, imagine they get Destiny and the previous year's Call of Duty free of charge. If 12 million people are still playing Black Ops II three years after release, of course there will still be a player base. And imagine if they could just pay a few bucks to level up their multiplayer character so they can play with their friends.
Activision wouldn't spend $5.9 billion without having a damn good reason. There's no way their Board of Directors would risk that much capital (especially knowing that this would be more than even Disney paid for the Star Wars brand) if there wasn't a higher than average chance they would recoup their investment. So there are plans afoot, even if we would start seeing them any time soon.