When gaming conglomerate Activision Blizzard announced that it would purchase King Digital Entertainment for $5.9 billion, the news made a lot of jaws drop across the tech industry.
Although King makes the immensely popular Candy Crush Saga game for mobile devices, the company has yet to come up with a similar blockbuster, despite releasing lots of games over the past few years.
Just for comparison’s sake, that $5.9 billion is more than Disney paid for the Star Wars and Marvel franchises (at $4 billion apiece), two properties that will almost certainly generate billions of dollars in reliable revenue for many years to come.
Naysayers aside, Activision’s deal shows the continuing dominance of mobile, especially in the consumer space; the giant’s executives know that, although Candy Crush may eventually find itself usurped by another competitor for the nation’s idle time, King has built a pipeline of just under 500 million monthly active users on iOS and Android.
But just because a mobile company has built a substantial following doesn’t mean it’ll thrive in the long term. Look at Rovio, maker of the popular Angry Birds games, which spent the past year laying off employees; in a similar fashion, Zynga, which rose to prominence on the strength of its Facebook games, has struggled to maintain its early growth rate.
With mobile apps averaging a lifespan of six months (according to recent data from Adobe), it’s harder than ever for companies to grow audiences and maintain traction in the mobile space, even as the mobile segment itself continues to expand. That presents an interesting challenge for tech pros in the mobile space who want to develop apps capable of surviving for years. For companies on the lookout to acquire apps, though, those sorts of survival rates should inspire caution.