Activision Blizzard (AVTI), the largest video-game publisher and the company behind such first-person shooter games as "Call of Duty" and "World of Warcraft," is trying to better position itself in the fast-growing mobile gaming market. But it's also moving to become more appealing to women.
Women are a segment that Santa Monica, California-based Activision is eager to attract. Chief Executive Robert Kotick underscored that point in a recent interview with CNBC, and it's easy to see why. Females aged 18 years or older represent 33 percent of the game-playing population, while young boys, who many people associate with the industry, account for only 15 percent, according to the Entertainment Software Association.
The average age of women gamers is 43, older than that for men, which is 35. Candy Crush is said to be played by more than 90 million people daily, most of them female, and that may be one reason for these statistics.
Acquiring Dublin-based King Digital will also help Activision increase its foothold in the fast-growing digital gaming market. However, as independent technology analyst Rob Enderle points out, that's not without its risks. King Digital faltered after its 2014 initial public offering because it wasn't able to duplicate the success of "Candy Crush" with other titles.
"You must be convinced that the title or derivatives of that title are going to be incredibly profitable given how much they are paying," he said. "It just seems like an awful lot of money for the kind of title that Activision isn't really known for, which suggests a high probability that they may have overvalued it."
Investors, however, appear to be applauding the deal, pushing up Activision's shares by 3.6 percent, or $1.25, in Tuesday trading. They closed at $35.82.
Wall Street has long fretted that King was too dependent on "Candy Crush," and investors sent its shares tumbling after the company's recent disappointing earnings outlook. King's shares are trading just under $18 per share, about 20 percent below its IPO price. But they soared Tuesday on the deal news by 14.8 percent, or $2.30, closing at $17.84.
Activision has been eager to attract more female gamers for a while. When it launched "Call of Duty: Ghosts" in 2013, it allowed players to chose a female soldier as the game's lead character. The company estimates that 20 percent of the game's players are women. Like other game publishers, Activision has come under fire for not hiring enough female programmers and for having images in its titles that some consider to be sexist.
King has struggled to expand its audience for years but is a significant player in mobile where "Candy Crush" and "Candy Crush Soda Saga" are two of the five highest-grossing mobile games. The company estimates that it has 474 million monthly active users on Facebook (FB) and other mobile platforms. Mobile gaming is expected to generate more than $36 billion by the end of 2015 and grow by more than 50 percent through 2019.