Analyst: Activision Acquisition of King Will Provide a Short Term Boost

3rd November, 0 replies

Analysts are weighing in with their opinions on Activision Blizzard's acquisition of Candy Crush developer King Digital Entertainment.

IHS Technology's director and head of games, Piers Harding-Rolls, is a little more critical than Wedbush Securities' Michael Pachter.



Harding-Rolls expects the acquisition to calm down shareholders and provide a short term boost. However, he isn't so confident about the future outlook for Activision Blizzard.

"With the increased competition to the Skylanders franchise from Disney, Nintendo and Lego, and the declining sales of its annual release of Call of Duty, the acquisition will aim to mitigate any shareholder anxiety related to both short term revenue growth and its profitability targets," he said.

"Indeed, King, although seeing its revenue decline in the last two quarters, is still highly profitable, which will significantly boost Activision’s overall margins and will give Activision immediate access to a new $1bn-plus franchise."



Harding-Rolls did, however, echo Pachter's view that Activision will now be able to break into the mobile market much more easily than it otherwise would have had the company pursued its own mobile initiative.

"King has a handful of what are termed ‘mid-core’ titles in its content pipeline," he said. "In the mobile space these are games that are targeted at enthusiast gamers that play for longer and monetise more strongly but are generally enjoyed by smaller audiences. These align more strongly with Activision’s current portfolio of content and may help bridge the gap between both companies’ audiences."

Source:

goo.gl/…

Around the Network

0 COMMENTS
Reply

Related Brainwaves

Trending Articles