GameSpot's The Lobby: Activision bought Candy Crush. Should you care?Activision just spent $5.9 billion dollars on Candy Crush creator King.com. GameSpot's Just Haywald comes on to tell the folks at The Lobby what this means for the publisher and the future of the video game industry.
[MUSIC] Hello welcome back to The Lobby we are here to talk about business with Justin Haywald. How you doing? I'm all about the business. How is business? Business is good. I'm wearing a tie today. You are, what's on your tie? It's a, I got this from Studio Jubilee, it's a Totoro tie. Nice. Nothing says [CROSSTALK] So those little Totoros on it. Nothing says business like some sweet, is it Gibille or Gibille? [UNKNOWN] Like the actual pronunciation was [UNKNOWN]. Yeah. Like I know [UNKNOWN]. [LAUGH] I'm asking the man who speaks Japanese fluently. [UNKNOWN] We're not here to talk about studio [UNKNOWN], we're here to talk about Activision purchasing Kim dot com. Kim dot com. They bought Kim dot com.>>Kim Kardashians' website.>>She does have a very successful mobile game though.>>But it's not as successful as the guy who made Mega Upload. Mega dot com. Is that what it's Mega dot com, Kim dot com? And now Activision owns Kim.com. [LAUGH] Well no, no not Kim, this is King.com. Oh. King.com. Right, they guys that made Candy Crush. [CROSSTALK] Yeah. And other games that you know really well like Candy Crush Soda Saga and Which candy saga. And owners of the words candy and saga as people with the [UNKNOWN] saga are all too aware of. So those were I think settled out of court, okay? The actual details of those will never come to light. They also were trying to go after somebody who was using the word candy [UNKNOWN] titled. [CROSSTALK] The developer of Candy Swipe which came out before Candy Crush Saga. It's called Candy Swipe. Candy Swipe. Wow. Did they try to take Halloween to course? No, there is no Halloween in the title. But candy. But they go after comic book characters for using the word crush. Are you serious? No, no that is not true. [CROSSTALK] I can't tell, I can't tell. Who knows? But let's talk about what we do know. Activision's purchased this company for an incredible amount of money. How much money and why did they do it, do you think? So it's over $6 billion. Okay. Which is an insane amount of money. And I think the reason that we think about it is just no matter what, all of these amounts of money for these companies are crazy. But this one sounds especially huge, because recently Disney bought Star Wars. For four billion dollars. Yeah. That means this worth more to Activision than Star Wars is to Disney. Look at it. Who cares about this? This guy there, he wishes he was playing Candycrush. Hey guy. Like, oh man, I got to kill all the Jedi cause they bet me in Candycrush. And it's such a like, not only a film franchise with Star Wars but merchandising. There's so many ways they're going to make money from that. Yeah. The amount of money is. Because at the end of the day, really, it's not that big of a thing because Candy Crush, even now when it's on the decline when Candy Crush and King are not doing that great, they still make over a billion dollars a year.. So, you know, Activision is going to make this back very quickly. It's not really the matter of money, but the fact that they value it at that amount of money, that what's foolish about Activision is that so many Properties who have so much that they can do. They can buy hundreds of smaller developers, but instead they went after the very biggest fish. Yes,>> Well, and what do you think the reason is they did that? So, is it like either it's because their trying to you know get a foot hole into this masses, not emerging market, mobile games aren't emerging anymore it's->> Well someday the mobile games will catch on>> [LAUGH] It's very much like -- It's bigger than Mason games in terms of gross revenue, surely at this stage. In just in terms of people who play it. Like people who don't think of themselves as gamers are actually gamers. Oh, completely, yeah, yeah. And they spend more time and more money on them than most of us do. Like, and -- when you think about Zynga, and when they think about a whale, like we think of a whale as like, 'Oh, this person spend like $100 or $200 in microtransactions." At Zynga, a whale is someone who can spend Thousands of dollars a month on Farmville. Yeah. What are you buying? [INAUDIBLE] It's like any other game that we play. If you're spending the farm money, then you're willing to buy the next DLC or whatever. I'm not going to spend $1,000 on Fallout. No matter how good Fallout 4 might be. I'm not gonna spend a thousand dollars a month on it. So let's about one of the business reasons for this, because King's shares have jumped up something like fourteen percent, Activision has also had a spike today. How much of this is just posturing for shareholders? How much of this has to do with how business is perceived, and not really-- And roads into new markets. Are they going to start making Call of Duty games on phones. Like, what are we looking at here? I think those are the kinds of things we are going to see. From our perspective, this seems like a ridiculous thing. It sounds like Activision, the Call of Duty maker, is buying Candy Crush Saga, and they're not. Cause Candy Crush is just a small thing, and that will ultimately Be gone. And King knows that. King knows that they have kind of a one trick pony. They've tried other games. Yeah. And Rovio, like the Funville developer, Zynga, those games have all failed. Nobody cares about those games as much anymore. And they've tried diversifying and they've just been completely unsuccessful. And King knows that they need other properties. They need a way to distribute games that will reach a bigger audience. Because they're on a downward trend. And Activision On the other side, had so many huge titles, like Call of Duty, and on the PC side, they had Blizzard. They have World of Warcraft and Hearthstone. They have these games that capture the core, but they don't have a casual audience. And that's where EA has just been killing them in the past couple of years. That EA, as much as we might despair in some of the things that they do, they're really successful, especially with their mobile games. Yeah, a lot of people play FIFA soccer. And this is Activision's opportunity to get a foot in that market without having to start from the bottom, like they're basically taking not the game that's at the top anymore cause that's the Clash of Clans type games Age of whatever Age of War. War of Ages. That is the current top. Game of Age. But even now, years after its come out, Candy Crush Saga is still, like, number three, and one of the others is number 6. And this is a way for them to get a lot of people really quickly. They have access now to a huge swath of users and a lot of money that they weren't getting before from that market, which is kind of I know people always throw out that term, but a blue ocean. Yeah. Like it is endless. People who don't think of themselves as gamers play these games. Your mom is someone who, well, I don't know about your mom. We never talk about that when- Yeah, yeah. I know, yeah. You know about my mom, but we don't talk about it. But my mom in particular loves these kind of dumb games. She wouldn't I wouldn't think of her as a hardcore gamer but she'll spend hours like. Which is the problem gamers have had in [UNKNOWN] because the it's a controller with all these buttons. And the closest traditional games, core gamers whatever we refer to ourselves as [UNKNOWN] To the mainstream was the Wii. And the only reason for that was because it was a remote control. Cuz people knew how to use a remote control. Your grandmother knew how to use a remote control, so she could play tennis. You know? And, I think that we are in a really insular bubble. We think, the PS4 and Xbox One are doing really well. They're doing better than the 360 and the PS3 were. And the PC is doing incredibly well as well, and getting more [UNKNOWN] If you think about it. But when you think of that in the broader context, like yeah it's doing better than the previous consoles did and it's still gaining acceptance and it's making a lot of money. But not compared to something like mobile gaming. Not compared to something like the ubiquity of TV and reaching out to literally the entire world. Because we love Call of Duty and Fallout and all of these other really big franchises. I can't wait to play Star Wars Battlefront. Mmm. But at the end of the day, that's actually a really small percentage of the potential audience of something that oh, I'm just gonna match these three colors. You can release that in any country, and there's no need to translate what does this mean. Localization, yeah. There is localization, there is translating. Not to put anything like that. But you were, it's a lot easier It's all like you can't read, and they get to figure it out. They're going to figure out, oh, yeah, put those together. So should we be worried? Like those of us who are in this bubble, those of us who are watching this show, playing these games that are behind us and are excited about Fallout and stuff. You look at a company like [UNKNOWN] who's basically just said, see you the traditional video game industry because of their massive money they have in their casinos and Pachinko parlors. There's a company like Activision which, obviously, still has massive fingers in traditional games especially with Blizzard and they own some of the biggest franchises. They're also a far ways away from the people that made Grand Prix and Pitbull. This market which might be that much more revenue-driving for them. So is this something we need to be continuously worried about, because we're seeing so many companies which were near and dear to video games, the bigger ones at least, spending more time on this. When you say worry about it, is this going to change what these big companies do and how they make money? Yeah I'm sure. From that perspective it's not gonna be great. There might be a new Metal Gear game, which is gonna be a [UNKNOWN]. Like this might be the continuation of a Metal Gear Solid. [LAUGH] And yeah we're gonna lose these Established franchises that we might have a lot of nostalgia for and a lot of something that it's holding onto it. But at the same time, most of these companies are not getting out of AAA gaming. They still see this as your invaluable audience and we wanna create games for you. It's really expensive to make things like Star War Battlefront and these Huge multi-year, multi-million, there's a reason we don't see GTA every year. It's expensive, and it takes a lot of time and people and money. But they're still making those, and in the long run, those still pay off. But at the same time, we still have Great indie developers who are making really wonderful experiences with really small teams. And that's the kind of thing that's never gonna go away. And that's the kind of way that we're gonna, I think continue to get the experiences that we love and that will be really memorable for us. From a game play perspective and not having to worry as much how can we increase our revenue this quarter over what it was the previous quarter. Interesting thought, Justin [UNKNOWN], thank you for coming on and explaining that crazy math to me and everyone watching. king.com Now owned by the good people of Activision. Let us know what you think. Do you play Candy Crush? Do you want [UNKNOWN] Call of Duty on phones? Let us know in the comment box below. [MUSIC] [BLANK_AUDIO]