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“Candy Crush” Company Goes Public

Submitted by on February 19, 2014 – 11:53 am4 Comments

King, the UK-based game maker behind the massive hit Candy Crush, announced this week that it had filed for a $500 million IPO on the New York Stock Exchange. The company has generated massive revenues, but like many mobile and online game makers, must overcome concerns that it is a one hit wonder.

King came out with Candy Crush in 2012, first for Facebook, and then for smartphones. The game involves swapping around the positions of different colored candies on a playing board, to try to line up three of the same kind in a row. Quick to play and with over 500 levels, the game has become immensely popular and addictive for players. It is the most popular app on Facebook, and one of the most downloaded free games for both iOS and Android.

Records show that King generated $1.8 billion in 2013, a steep rise from 2012. But over 75% of that profit came from just one game: Candy Crush. And that revenue comes from a small percentage (4%) of the hundreds of millions of players who pay for “power-ups” to get ahead in the game (otherwise, it’s free to play). And last quarter, for the first time, revenues declined.

“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 won’t be able to maintain or grow our revenue, and our financial results could be adversely affected,” King admitted in its SEC filings.

The recent world of tech IPOs is full of cautionary tales, with trendy companies unable to convince investors that they can monetize and be profitable in the long term. Companies like Facebook and Groupon had infamously rocky public outings, and stock prices have continued to struggle. Fellow game maker Zynga, the San Francisco-based company behind FarmVille, went public in 2011, only to see its stock prices fall 50%.

[via Wall Street Journal]

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