King believes that Kardashian: Hollywood and 2048 could negatively affect the success of the "royal" games
There was a strange situation with King in the last quarter. On the one hand, a great quarter, the company sold $593.6 million worth of digital goods, remained in the black with a profit of $165.4 million, released a couple of hits, and the shares are creeping down. Why? Let's figure it out.
Let's start with what good happened to King from April to June.
- The company's revenue reached $593.6 million (compared to $455.5 million in the same period a year earlier);
- King's profit was $165.4 million (compared to $125.9 million in the second quarter of 2013);
- DAU increased to 138 million (from 76 million);
- MAU to 485 million (from 265 million);
- The number of unique players (MUU) has grown to 345 million (from 194 million);
- 3 games were in the box office Top 10 in the App Store and Google Play in the USA;
- Candy Crush Saga's share of revenue fell to 33%;
- We presented 8 web projects and launched Pyramid Solitaire Saga with Bubble Witch 2 Saga.
And so, it would seem, after such positive news, information began to appear that not everything is so good in the "Danish Kingdom". The company's shares on the stock exchange have fallen by more than a quarter — to, at the moment, $13.94 per paper.
The reasons are in the bad news:
- The number of unique payers has almost not grown, as a year ago, the figure does not exceed 10.5 million people;
- Sales of Candy Crush Saga are falling;
- The growth dynamics has also noticeably decreased. If in the first quarter of 2014, revenue and revenue increased by 195% and 142%, respectively, compared to the first quarter of 2013, then, in this case, the growth was 30% and 31%.
- Due to the drop in sales of Candy Crush Saga, financial forecasts for the third quarter and for the current year have significantly dropped.
In general, according to King COO Stephane Kurgan, the company is seeing a drop in the profitability of all projects. Farm Heroes Saga, which is King's new rising star, earns far less than what was expected of her. Moreover, they do not know why this is so. One of the assumptions is that the success of Kim Kardashian: Hollywood and 2048 "ate up" the time that users could spend on King games.
King, a company that started in the segment of casual and flash games for PC, thanks to the success of Saga series projects on Facebook and mobile platforms, has turned into one of the most successful global game studios with a DAU of more than 90 million in a couple of years.
