Everyone knows that King.com’s Candy Crush Saga is a money-making machine. So perhaps it should come as no surprise that King has filed for a $500 million IPO, according to Business Insider. Here’s what we know so far…
1. ‘Their Growth Numbers Are Insane’
According to Business Insider, “Their growth numbers are insane.” BI goes on to say:
“In Q4 2012, total revenue was $71 million. A year later, that jumped to $632 million. And the margins are big. On that $632 million in revenue, they booked $269 million in profit.
It’s worth noting that several metrics actually show a tiny dip in Q4 vs. Q3 of last year, which might raise an eyebrow.”
Fox Business writes that JPMorgan Chase, Credit Suisse, Bank of America Merrill Lynch, Barclays, and Deutsche Bank are expected to underwrite the IPO.
The Bloomberg video above reports on the IPO, and notes that “you gotta be in on this action.”
2. Candy Crush Saga Makes King the Most Money
Last year, Candy Crush's parent company made more than a quarter of Amazon's total lifetime earnings http://t.co/kaDg45nwVl
— Derek Thompson (@DKThomp) February 18, 2014
3. King Has a Large Player Base
— Eden Penketh (@MonkeyMagicEden) February 18, 2014
According to the New York Times, King has has 128 million daily active users across all of its gaming titles. About 93 million of those users are playing Candy Crush.
4. King Is Worth Billions
BGR and other news outlets are reporting that King’s gaming empire is worth $5 billion. BGR adds:
“The likely trigger for King’s IPO was the better than expected success of its most recent game, “Pet Rescue Saga.” This app came under some criticism for being too derivative of “Candy Crush Saga” when it recently debuted, but it has turned out to be surprisingly lucrative for a knock-off. “Pet Rescue Saga” is a top-10 revenue generating iPhone app in 33 countries at the moment.”
The Bloomberg video above attributes the company’s success to the addictive nature of Candy Crush Saga.
5. There Are Concerns About King’s Business Model
Candy Crush is free, and 98 mm people play every day. King's business depends on 4% that routinely buy power-ups. http://t.co/RQiatN3oKu
— Peter Kafka (@pkafka) February 18, 2014
Some investors are concerned that King’s business model could be an issue. The company’s games are all free. Revenue comes from players who opt to buy additional in-game items. According to Re/code, “4 percent of its users — about 12 million people — are regular buyers.” However, the transactions being made here are often just a few dollars at a time.