Activision has stopped Candy Crush maker King from becoming the next Rovio

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King CEO Riccardo Zacconi

King

King founder and CEO Riccardo Zacconi.

King Digital Entertainment, the games developer behind the wildly popular Candy Crush app, got a lucky escape this morning when Activision announced it had bought the startup for $5.9 billion (£3.8 billion.)

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Candy Crush launched in 2012 and King saw strong growth in its early days, but it has failed to replicate the success of the puzzle app through any of its subsequent games.

King went public on the New York Stock Exchange last March, but the IPO didn't go as planned, with its stock collapsing on the first day of trading from $22.50 a share to $19 a share. Since then the company's shares have fallen to $15.

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The company writes on its website that it has over 200 "fun titles" but many would be hard-pushed to name them. The franchise includes games such as "Farm Heroes", "Pet Rescue," and "Bubble Witch".

But Candy Crush still accounts for over a third of King's revenues, according to the company's latest filings.

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King isn't the only mobile gaming company to suffer from one-hit-wonder syndrome. Angry Birds creator Rovio is also struggling to expand its portfolio of games. The Nordic company has been laying off hundreds of people across the company recently in a bid to cut costs.

On October 21, Rovio confirmed it is cutting 213 jobs as it struggles to monetise Angry Birds, which was launched in 2009 and had been downloaded more than three billion times as of July 2015.

King appeared to be on a similar trajectory to Rovio, so some will likely see its sale to Activision as a lucky escape for the company.

Other mobile gaming companies like Zynga, the San Francisco firm behind "Farmville," are also struggling to make profits off the back of games they allow people to download for free.

The business models of King, Rovio, Zynga, and others, all depend to varying extents on people making in-app purchases, but the truth is many gamers are reluctant to spend money.

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Research from data solutions provider Return Path found the number of people making in-app purchases in games including King's Candy Crush, plus Supercell's Clash of Clans, and Machine Zone's Game of War, was steadily declining. Candy Crush saw a 30% drop in in-app purchases between January and March of this year.

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