King Digital Entertainment, maker of the ultra-successful Candy Crush Saga, has submitted its F-1 form to the SEC using the ticker symbol "KING" for its initial public offering. Launched in 2012, Candy Crush has spawned additional titles such as the Papa Bear and Farm Heroes sagas. It has become apparent that King wants to bounce users between its apps using timed constraints that can be removed if the player is willing to pay for it, and this strategy has placed the company into the league of mobile studio hit-makers like Halfbrick and Storm8.
The King of apps
King's apps are cross-promoted within its umbrella, leading to a mobile army of addicted users on both Apple iOS and Google Android-equipped devices. Reuters has reported a valuation in excess of $5 billion, and King is anxious to gather investors while continuously dominating the app charts. The intuitiveness of King's apps make them easy to learn, yet hard to master as the difficulty gradually increases. This setup compels users to buy their way to victory instead of awaiting the replenishment of lost lives. Candy Crush is essentially a reskin of the popular puzzle video game Bejeweled, but instead of gems, users match variations of high-resolution candies. The obvious references to Hasbro's board game Candy Land also apparently capitalized on a sense of nostalgia for young and old alike.
Candy is dandy
Based in Dublin, UK, King has been able to captivate audiences with expert design and habit-forming game play. King, along with owners Apax Partners, LLP and venture capitalist firm Index Ventures, plans to offer $500 million in stock, but will likely exceed that target. King has been able to leverage the social aspect of bragging rights by integrating Candy Crush Saga, as well as lesser-known titles, through web versions of its games on Facebook. It's this inter-connectivity that developed the social word-of-mouth, promoting Candy Crush to a household name with televised ads, which is not typical for mobile games.
Now and later
Candy Crush Saga's reliance on Facebook friends to assist free users' game progression has been instrumental to its rapid growth, and King has approximately 98 million users swapping candies daily. Unlike a behemoth multimedia corporation or a traditional video game business, King cannot rely on external IP to increase product awareness. It has yet to be determined if King can replicate the downturn of mobile leaders Zynga and Rovio, who experienced huge surges of revenue before users got bored and looked elsewhere for alternatives. King's portfolio of titles has more diversified content, and with new intellectual properties in the pipeline, it appears that the company has a long-term strategy for mobile dominance. King's recent trademark of the word "candy" also proves the seriousness of how far the company is willing to go to protect its intellectual property.
King was able taste the sweet success of $568 million in profit from $1.9 billion of revenue in 2013. This trend will likely continue through 2014, with additional updates to the sugar-crushing format. Additionally, the developer is not reliant on a specific formula for its apps, which was the Achilles' heel for competitors Zynga and Rovio. King also has been able to use the sector's forerunners as benchmarks in the mobile industry to pace user advancement without forcing them to wait in real-time. Unlike Angry Birds, King has not yet begun to merchandise its brand in the aggressive way that Rovio has, which could improve the company's financial position outside the mobile space.
Opportunities for expanding King's brand are tied to a nostalgic connection with fans. It is possible that, with additional capital at its disposal, King will expand on Candy Crush via merchandising consumer goods , various media ventures such as a televised series or children's motion picture, and the inevitable sequel to continue the saga. The utilization of cloud services to synchronize game progression across multiple platforms ensures those trying to break the habit can pick up right where they left off. King has developed over 180 titles, and now that the company has achieved its three-star rating, it is incredibly unlikely the company will close shop soon.
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