King Digital Entertainment is an Irish company, and says it wants to trade on the NYSE -- eschewing the tech-heavy NASDAQ -- under the “KING” ticker symbol. While it has obvious hits under its belt, it faces the same challenge that other, similar firms, such as Zynga and Rovio face: What to do when the crush of interest on its big, hit app wanes?
While there are additional addictive King Games -- "Farm Heroes Saga" has replaced "Candy Crush" on our mobile device, simply because we had gone so far in the latter game that it was a) repetitive, b) so hard that it was ridiculous (though not as bad as "Flappy Bird").
King posts its own warning in its F-1 filing: here is already a warning sign in King’s filing: It said that even though its revenue was colossal in 2013, it declined from $621 million in Q3 to $602 million in Q4. King said "the decline was driven by a decrease in Candy Crush Saga gross bookings,” even though it is making a concerted effort to diversify into other games.
The company warns that "A small number of games currently generate a substantial majority of our revenue" and "We (King) must develop new games and enhance our existing games so that our players will continue to play our games and make purchases of virtual items within our games."
"Candy Crush" was launched in 2012 and currently generates 78 percent of King's revenue. The game has an incredible 93 million people playing it daily (note to "Flappy Bird" fans: It was unclear how many daily users there were for the now defunct game, but it was generating about $50,000 a day in advertising revenue).
The games are free. It's the in-app purchases that make King its money. King said that four percent of its users, or about 12 million people, are regular -- not occasional -- buyers.