The Candy Crush Saga-maker is getting bought out. The once uber-hyped King Digital (KING:NYSE), with its complex roots in Sweden and the UK, has struck a $5.9 billion deal with Activision Blizzard (ATVI:NDQ), itself something of a computer games giant, with big console hits including World of Warcraft and Call of Duty.
You may remember the fanfare with which mobile gaming designer IPO'd in March 2014. Riding the enormous success of its Candy Crush Saga success – a game beloved of commuters everywhere - investors were talked into backing the Nasdaq float at $22.50 a share, valuing the business at a staggering $7 billion, having knocked back the chance to list in London.
But this is a notoriously fickle business and gamer loyalty is thin at best, and often entirely non-existent. Which has made its early soaring growth hard to maintain. Having chalked-up three consecutive quarters of revenue above $600 million, it's been much harder going since. It's most recent published figures, for the three months to 30 June, saw revenue tumble to $496.4 million, versus $570 million to end March.
Which has made life pretty hard work for investors too. Just six months post its IPO the stock had halved. The rally in the stock price since August is presumably down to buyout speculation that has come to fruition now.
The apparent appeal to Activision is mobile, it's where King exclusively sits with 500 million-odd users. Activisin's own gaming back yard is firmly in the PCs and consoles space. But we've seen gaming companies explode on to the investment scene many times before as a particular game shocks everyone with its blockbuster success. Remember Eidos, for example, and the Lara Croft love-in, a classic example of the industry at work.