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Why Activision Is Well Positioned to Reach Players across Categories

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Near-term and long-term opportunities

Activision (ATVI) will launch Guitar Hero and King Digital Entertainment (KING) is planning to launch a mid-core title and three new games from its existing franchises by the end of 2016. In the long term, the combined entity post-acquisition will be looking to build on proven franchise models and combined capabilities to bring new intellectual property to the market in the core, mid-core, and casual genres. The combined company will also be positioned to reach players across categories and have long-term potential for growth opportunities by applying strengths, assets, and operational expertise from both companies to cross promote games.

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King Digital has a large and highly engaged network

In 3Q15, King Digital’s month active users stood at 474 million, with 330 million monthly unique users, 133 million daily active users, and 1.4 billion games played daily. In 3Q15, Candy Crush recorded 92 million daily active users and games such as Farm Heroes, Pet Rescue and Bubble Witch recorded daily active users of 18 million, 8 million, and 7 million, respectively.

As we stated in Part 6, King Digital has a strong pipeline of games in the near future with regular content update and sequels to proven and successful franchises. It’s also looking to target new geographies with potential in Asia.

Activision comprises 0.49% of the PowerShares QQQ Trust (QQQ) and 0.39% of the iShares S&P GSTI (TM) Technology ETF (IGM). Electronic Arts (EA), another firm in the home entertainment space, also comprises 0.36% of QQQ.

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