What's going on?

The maker of �Call of Duty� (Activision Blizzard) is buying the maker of �Candy Crush� (King Digital) in a $5.9billion deal�that combines two of the big dogs in the gaming world.

What does this mean?

This deal is about increasing Activision�s penetration of the mobile market because most of its games are currently played only on consoles. Activision can now use King Digital�s experience and customer base to bring more of its well-known brands to users� mobile devices � including perhaps Guitar Hero, which could make for some very awkward moments on the subway... This deal is also about Activision increasing its number of customers: the combined company will have over 500 million users. Also, King Digital�s user base is 60% female whereas Activision�s games are more male-dominated - so it creates a new expansion opportunity for Activision.

Why should I care?

1. The bigger picture: Like the Pfizer-Allergan potential deal, there is a tax angle here too. Activision has cash overseas that it cannot bring into the US without paying a huge amount of tax. It's using this cash to fund the�acquisition of King Digital (an Irish company) but, as the CEO said on CNBC, it would invest it in the US if the tax code were changed.
2. For the stocks: Both stocks were up - meaning investors seemed to like the deal. King Digital�s stock was up because Activision agreed to pay a premium for the stock (of more than 15% over Monday�s closing share price). Activision stock was up more than 3%, probably because investors like the new commitment to mobile gaming � although the change in strategy likely�makes Activision a riskier company (at least according to this analyst).