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kompleted.com

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Reply with quote  #1 
Holy crap. Two thoughts immediately run through my head:
  1. $5.9 billion spread over 474 million monthly active users = $12 LTV per user. Higher than Rovio's $5 but lower than Clash of Clan's $19. 
  2. Can we indie developers get just 0.01% of that? Pretty please! Oh, and it is just going to get harder for indie developers in the future [frown]

Some other stats for comparison:
  • King reported annual revenue of $1.9 billion and a profit of about $568 million
  • Activision paid a 20% premium for King
  • King spends 20% of revenues on advertising which breaks down to $380 million per year or over a million dollars a day
  • King is being bought out for less than IPO price because the stock dropped 50% in value in 2014
  • King is worth $5.9 billion, Minecraft was only worth $2.5 billion. 
Fascinating but also somewhat depressing. 
What are you reactions?

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Working on a fix for app discovery...it is not going well. [comp]
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Martin

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Reply with quote  #2 
Hey Kompleted. I just seen your post. I also caught this news yesterday. I did a post about it on the investment forum because it relates to that:

http://howtogetrichinvesting.discussion.community/post/activision-buys-candy-crush-saga-developer-should-i-invest-in-stocks-and-markets-that-i-7782063?pid=1289754581

This is an area I need to learn more about, but I've seen huge huge numbers when it comes to game company acquisitions. I think this is mainly because Activision wants to get in to the mobile space. But one thing I read a few months ago is that Candy Crush has already peaked because its been at the top for over a year and so getting more and more users like it did before is just not possible. Also the rest of King.com's portfolio is pretty much the same type of game, I don't know if this is a plus or a negative though because they really know what they are doing when it comes to the casual match-3 / bubble shooter space. They also really know how to reach the top ranks and how to monetise casual users.

I definitely want a piece of these big money transactions in the games industry. I just need to figure out how [smile] Investment in general is something I need to learn more about.

Martin
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Jake

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Reply with quote  #3 
Market sees this as a good match therefore both companies have the benefit of increasing stock price. Quite often though it is so that the company which is being acquired will have its stock value go up and the buyer's stock will go down. The reason for this is that most acquisitions are about buying market share. Unless the deal results near monopoly (at least on some markets) the new company doesn't have any better price setting power than before, hence their profits do not increase.  The only road to finance the deal is to find efficiency through layoffs.

The reasoning behind this deal is that Activision can have their IP introduced as mobile titles (just like Fallout Shelter did so brilliantly). King is a perfect target as they have become stuck into their match-3 and growth is nowhere insight. It is a great move from King but remains to be seen if they can deliver anything but match-3 COD. 

Two big mobile game makers (King and Supercell) have now been bought out. Who will be the next? I wouldn't be surprised to see that this acquisition has driven up the prices for listed mobile game developers.

What to learn from here... Pick a genre and get good at it. Develop something that has value. Characters, stories...
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