Candy Crushed? Here's A Chart To Make You Think Twice About King's Looming IPO

Mar 12 2014, 8:32pm CDT | by

Candy Crushed? Here's A Chart To Make You Think Twice About King's Looming IPO
Photo Credit: Forbes Business

Candy Crush is a maddeningly addictive game on which people are willing to spend a buck or more to lengthen their vividly-colored screen time. But potential investors to’s forthcoming IPO should note it’s also a game that brought in roughly three quarters of’s revenue in the fourth quarter, and that there may be a cost to relying so heavily on a digital golden goose, no matter how hooked its users or how much King values itself to be — a remarkable $7.6 billion .

The chart above shows that Candy Crush has recently been sliding in the ranks of downloaded apps on both Apple’s App Store (above) and Google Play (below). Having been firmly in the top 10 for much of July and all of August 2013, the game eventually dropped into the teens and even 20th position in December 2013, according to app analytics company App Annie.

That slide mirrors a fall in revenue for Candy Crush’s maker, King Digital Entertainment, and shows just how closely correlated the company’s finances are to one game. In the last three months of 2013, King’s sales slipped to $632 million from $648 million in the previous quarter, while net profit also fell to $269 million from $290 million.

King did not wish to comment for this story, but the company has been open about the investment risks in its SEC filing today, noting that “a small number of games currently generate a substantial majority of our revenue,” (though “one game” might have been more accurate). The company said that in the future it expects Candy Crush to represent a smaller percentage of gross bookings from mobile as it expands into other games:

“If the gross bookings of our top games, including Candy Crush Saga are lower than anticipated and we are unable to broaden our portfolio of games or increase gross bookings from those games, we will not be able to maintain or grow our revenue and our financial results could be adversely affected.”

King has been producing casual games for a decade and been profitable since 2005, so potential investors are of course also betting on the company’s clever strategies for sniffing out and promoting the next blockbuster hit that will dominate app rankings.

But history tells us even the most effective strategies which stretch the boundaries of exploitative game mechanics can’t guarantee future blockbusters that replicate what Candy Crush has achieved till now. Just ask Zynga, maker of the blockbuster social game Farmville, whose shares have fallen 40% since its December 2011 IPO. Zynga’s shares debuted at $11 but have been hovering around the $3-5 mark for almost two years.

Rovio, the maker of blockbuster mobile game Angry Birds, has chosen not to go public, though when I visited the company’s Espoo, Finland-based offices in June 2011, management then were tentatively excited about a future IPO. Rovio back then had just seen its annual revenue jump by 300% and it was dominating the top ten charts globally. Since then however, Angry Birds has fallen into the mid-30s in rankings according to App Annie.

“We don’t want to estimate ourselves in bubblelicious figures,” Rovio’s vice president Ville Heijari eloquently said then, adding that Rovio didn’t want to “rush” towards an IPO. That may have been wise in hindsight. Rovio has yet to release a game with the same impact of Angry Birds, though it’s had relative success in milking the game’s brand and characters with merchandising deals.

It’s worth noting that King may manage to counterbalance Candy Crush’s eventual disappearance from our screens with other, addictive games. Its other colorful offering, Farm Heroes, seems to have the most potential. According to the company’s filing it had racked up 20 million daily active users in February, up rapidly from 8 million in December 2013.

But it’s still no Candy Crush, which had 93 million users in December 2013.

Source: Forbes Business


Don't miss ...


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

Bhopal fugitive Warren Anderson is dead (Roundup, Changing dateline)
Washington, Oct 31 (IANS) Warren Anderson, the former CEO of Union Carbide Corp, has died at 92 after living for 30 years under the shadow of the 1984 Bhopal gas tragedy that killed thousands.
Sit-ins delayed building powerhouses: Nawaz Sharif
Islamabad, Oct 31 (IANS) Prime Minister Nawaz Sharif Friday blamed sit-ins for delaying the construction of powerhouses in the country, as cricketer-turned-politician Imran Khan continued protesting with supporters in the capital city for over two months.
Britain to repay part of First World War debt
London, Oct 31 (IANS) British Chancellor of the Exchequer George Osborne Friday announced that the British government will pay off part of the country's First World War debt as part of the redemption of bonds stretching as far back as the 18th century.
UN-Habitat presents the first World Cities Day
Shanghai, Oct 31 (IANS/EFE) The UN Human Settlements Programme (UN-Habitat), headed by former Barcelona mayor Joan Clos, Friday launched its first World Cities Day in China, to be held every Oct 31 to promote sustainable development.

Latest from the Network

Apple Outsmarts Samsung in Terms of Revenue Generation
Samsung can sell more products, but it doesn’t mean that it will earn more profit, as Apple overtakes the Korean giant with respect to the earnings.According to the Cult of Mac, Samsung earned a profit of $3.8 billion...
Read more on Apple Balla
Apple Declares Not to Remove PCalc iOS Calculator Widget
The PCalc iOs calculator widget is free from the risk of being removed, as Apple decides not to drop it from the App Store.According to Tech Crunch, the officials of Apple have confirmed about the move, stating that it...
Read more on Apple Balla
Seth Rogen to Act as Steve Wozniak in the Steve Jobs’ Movie
Seth Rogen has got an important role in the biopic of the late Apple co-founder Steve Jobs, as he has been selected to play as Steve Wozniak.According to the Variety, Rogen will be advised directly by Steve Wozniak, the...
Read more on Apple Balla
Ponzy schemer cheats residents of $22 mn, gets 15-year jail
Washington, Oct 31 (IANS) If you have been one of those approached by some 'known' person for investing in something with an assurance of 'easy money', you may benefit reading about this Ponzi schemer jailed in the US...
Read more on Politics Balla
Burkina Faso's president quits, army chief takes power (Roundup)
Ouagadougou, Oct 31 (IANS) Burkina Faso's army chief Gen. Nabere Honore Traore assumed power Friday after President Blaise Compaore announced his resignation following violent protests against his attempt to extend...
Read more on Politics Balla
Spanish government challenges Catalonia's symbolic vote on independence
Madrid, Oct 31 (IANS/EFE) Spain's government Friday challenged Catalonia's decision to hold a symbolic vote Nov 9 as an alternative to a referendum on independence stalled by the Constitutional Court. The government...
Read more on Politics Balla
Myanmar roundtable summit discusses political issues
Nay Pyi Taw, Oct 31 (IANS) Myanmar's first five-party roundtable summit held in the Presidential Palace here Friday discussed some key political issues in the country, presidential spokesman U Ye Htut said at a press...
Read more on Politics Balla
Jake Gyllenhaal saves outrageous clothes for Halloween
Jake Gyllenhaal always wears his ''sl***iest outfit'' every Halloween. The 33-year-old actor has revealed his dad, director Stephen Gyllenhaal, is ''obsessed'' with Halloween and throughout his childhood Jake and his...
Read more on Celebrity Balla
Katie Holmes would tell her younger self to 'relax'
Katie Holmes would tell her younger self to ''relax''. The 35-year-old actress, who has eight-year-old daughter Suri with ex-husband Tom Cruise, claims she never believed she could carve out a career in Hollywood while...
Read more on Celebrity Balla
Joshua Jackson calls Diane Kruger his wife
Joshua Jackson calls Diane Kruger his wife. The 'Affair' star, who previously admitted he and his German girlfriend of eight years are unlikely to ever marry, doesn't like referring to the blonde beauty as his...
Read more on Celebrity Balla