The Big Crunch

What's King Digital worth to a Blizzard?

Characters from King Digital Entertainment "Candy Crush" game stand for a photograph in front of a trading post on the floor of the New York Stock Exchange, March 26, 2014.
Jin Lee | Bloomberg | Getty Images

A lot of people gasped Monday night when Activision Blizzard announced it would acquire King Digital Entertainment for $5.9 billion. Some might even have choked on their candy. But it could be a savvy move: The average "Candy Crush" player spends upward of $80 a year on the saccharin swiper.

If that sounds to you like a lot to pay for a game company, consider that King Digital — most famous for its "Candy Crush Saga" mobile games — had revenue of $2.1 billion in the 12 months ended in September. The deal clears the way for Blizzard, one of the most successful developers of desktop and console games, to move into the mobile space.

As we've reported, mobile is the great growth area in the gaming arena. Within mobile gaming, it's all about games that offer in-app purchases (nee "microtransactions" or "freemium gaming"). That's when a user spends small amounts, often a dollar or so, at a time to play their favorite game. The game itself is free to play, but you can spend a bit to get an additional feature or to skip past a frustrating level.

And people get stuck on a lot of frustrating levels, apparently. Mobile gaming is forecast to bring in $30.3 billion in 2015, beating console games for the first time, according to Newzoo, a market research firm.

King is a pretty good deal if you look at its holdings. The company developed two of the biggest games on mobile platforms — "Candy Crush Saga" and "Candy Crush Soda Saga." Data from NPD Group's Checkout Tracking offer a glimpse into who pays these freemium rates and what their spending habits tend to be.