King Digital Entertainment, makers of the pop-hit Candy Crush Saga, have filed to float on the New York Stock Exchange.
This move has been rumored for months, so comes as little surprise. However, as King’s current value stands at more than $5bn, this is potentially very big news for fans of the game.
While King have garnished a lot of negative press recently following their trademark of the word “candy” and attempted trademark of the word “saga”, Candy Crush Saga was the most downloaded free mobile app of 2013, and is still very popular among the general public. Candy Crush Saga has been downloaded more than 500 million times since its 2012 release.
While Candy Crush Saga is free to play, players can make in-app purchases, using real-world money to help them through the 500+ levels the game has to offer. According to the IDATE digital research and consultancy firm, the game logs over 700 million game sessions per day, world-wide, and earns King a daily $850,000 through these microtransactions.
The game helped King raise over $600m in the final quarter of 2013, leaving the company a cool $160m in profits. The IPO (Initial Public Offering) filing reveals that King is hoping to make a further $500m (£300m) from this move, though they are yet to reveal just how many shares they are offering, and at what price.
At this point, many are wondering if this move will pay off. Many will still remember Zynga, the company behind Farmville, sought to raise $1bn (£640m) at their IPO back in 2011, and saw their share value drop 5% on their first day. Analysts and buyers alike will be trying to compare the two companies at this point, though it has been noted by analysts that King stands in a better business position by being firm friends with Facebook – a bridge that Zygna burned long ago. If profitable, this move will likely lead to a knock-on effect on Facebook’s share prices.
Nobody knows how King will do in the future. Of their 180 games, Candy Crush Saga is by far their biggest money maker. The company admitted that 78% of their revenue comes from Candy Crush Saga alone. This level of concentration on one title seems more than a little odd.
The news of King’s decision to abandon their native country in favor of the US will no doubt be a missed opportunity for the British Government. Perhaps in light of this, the Chancellor of the Exchequer will finally listen to TIGA and push through the heavily delayed game tax credits.
Nic Bunce
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