King Digital Entertainment PLC, publisher of the free-to-play Candy Crush Saga has announced that it has filed for Initial Public Offering (IPO) to list its ordinary shares on the New York Stock Exchange under the ticker symbol 'KING'.
The deal, lead by Merill Lynch, J.P. Morgan and Credit Suisse, has seen a registration statement regarding King's securities on Form F-1 being filed with the United States Securities and Exchange Commission, but the proposal has yet become effective.
King made a quarter of Amazon's lifetime earnings in just one year
With the news came an opportunity for perspective investors to look inside its books, revealing revenue of $1.88 billion with a net profit of $568 million. So King made the equivalent to more than a quarter of Amazon's lifetime earnings, in just one year, according to The Atlantic. It is a staggering amount and a great increase on 2012's figures of $164.4 million revenue and $7.8 million profit.
An average of 128 million daily active users was boasted by King, of which 93 million are playing Candy Crush Saga. In the last quarter of the year an average 408m monthly active users were also logged.
Needs to diversify
With Candy Crush currently accounting for 78 per cent of King's player spend, and most of King's profits currently resting on the performance of the game, there could be some fragility to its bottom line. Its lack of diversification could mean investors aren't too keen to put money into the business, especially with many previous examples of disappointment following high-profile viral hits such as Zynga's Farmville and Rovio's Angry Birds - in the similar social and casual sectors of the gaming industry.
"The opportunity in front of us is exciting: mobile usage is exploding and games are commanding the lion's share of time spent," King wrote in is IPO filing. "Going public creates a liquid market for our current and future employees and equity holders and will give us greater flexibility to act on strategic opportunities if they arise in the future."
Recently King was in the news for trademarking the word 'Candy', which has affected a number of developers and generated quite a few negative headlines for the company. Accusations of cloning Matthew Cox, member of indie studio Stolen Goose's game also surfaced adding to the bad press.
One hit wonder?
Weighing up King's recent PR setbacks and the possibilities of Candy Crush following suit of other once-was-a-hit games it's hard to know whether the company is a good investment. I hear that paying users are already declining due to completion/saturation of the game and its popularity is going off the boil as the public gravitate to the next casual game phenomena.
