Candy Crush Saga maker King Digital Entertainment PLC has acquired Seattle-based mobile game studio Z2Live Inc. for $150 million, consisting of $45 million in cash up front, and up to $105 million of additional cash linked to future events.
London-based King is known mostly for its “Candy Crush” franchise. It reported strong earnings today with sales up 20% and a special 94% dividend, that led to an 18% jump in its share price in after-hours trading.
Founded in 2009, Z2 currently offers two titles: Metalstorm Online and the fairly popular game Battle Nations. These premium online action and strategy games are free but encourage paid upgrades. Several of its games have been top-grossing titles on the iOS platform.
King, maker of the famous game Candy Crush, said the acquisition will help diversify the company with new games. “Through this acquisition, the company will incorporate a proven team focused on contributing to our diversification into new genres,” King wrote in a press release. “Z2 will be our first game studio in the United States.”
King is gaming juggernaut with 1.5 billion average game plays during the fourth quarter. The company’s gross booking increased 20% in 2014, coming in at $2.4 billion, according to the company’s earning today. It finished the year with a healthy profit of $575 million.
King employed 1,200 people at the end of 2014, with nine gaming studios in Asia and Europe. The acquisition of Z2 will bring about 100 new employees to King and is expected to expand the gaming franchise beyond the casual gaming genre. The new acquisition marks King’s 10th gaming studio and its first in USA.
King CEO Riccardo Zacconi said in a conference call that Z2 is a “great cultural fit,” with proven success in developing “top 10 grossing non casual games.” “We look forward to welcoming them to King and joining forces to push this opportunity together,” he said.
In an email, Madrona’s Tim Porter said that Z2’s strategy and action games will be “a great complement to King’s library.”
Lou Fasulo, who led the Z2 until the acquisition said all of the Z2’s 106 employees will remain at King and that the staffers will continue to work on ‘an exciting pipeline of games’ which are now under construction.
“The complementary strengths of the companies will help our new games reach their full market potential – beyond what we could achieve as a stand-alone company,” Fasulo said.