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King Releases New Games for the Mobile Gaming Market

Posted on Wednesday, Dec 24th 2014

According to an eMarketer report released last month, the mobile gaming market is expected to surpass the traditional console gaming market in terms of revenues in 2015. Latest market estimates project mobile game revenues to grow 42% over the year to hit $25 billion in 2014. The revenues are projected to increase to $30.3 billion by 2015 and to $40.9 billion in 2017. For the current year, eMarketer expects the number of US smartphone gamers to grow 20% to 116.0 million and account for 70% of smartphone users in the country.

King’s Financials
King Digital Enntertainment’s (NYSE: KING) third quarter revenues fell 17% over the year to $514 million compared with the market’s estimates of $488.2 million. Gross bookings fell 16% to $544 million. EPS of $0.56 was also higher than the market’s forecast of $0.47.

Among operating metrics, like most digital companies, growth in King’s user base is slowing down. They ended the quarter with 348 million monthly unique users, recording a growth of 29% over the year, but a mere 1% over the quarter. Monthly active users grew 37% over the year to 495 million users and daily active users increased from 109 million a year ago to 137 million. King reported monthly gross average bookings per paying user at $20.92 in the quarter compared with $16.60 a year ago.

King expects to end the current quarter with gross bookings of $525 million-$550 million.

King’s New Games
King’s biggest game still remains Candy Crush Saga, which accounts for more than half of their revenues. During the last quarter, King reported over 834 million daily plays for the game. To continue to grow the offering, they recently released Candy Crush on Windows. The game was launched with 690 levels for players and comes with the ability to seamlessly synchronise progress across multiple devices through Facebook.

Last month, they released a sequel to Candy Crush called Candy Crush Soda Saga. The game leverages on the popularity of Candy Crush and retains the familiar match-3 gameplay and Saga Map. The game is available on Facebook, iOS, Android, and Windows Phone and has already helped King jump back to the top of the download charts on iOS and Android.

Besides Candy Crush, they are also increasing focus on other games. During the current quarter, non-Candy Crush games accounted for 49% of the company’s revenues compared with 41% a quarter ago. Non-Candy Crush Saga gross bookings increased to $264 million.

They released four other mobile games this year with the latest one being Diamond Digger Saga, which also operates on the freemium model. The basic app is free to download and additional premium features are available for purchase. The app, available on iOS and Android, features bright, colorful graphics, friendly characters living in a fantasy world, 50 levels to complete, and leaderboards to watch friends and competitors. Users can also sync the game between devices and unlock full game features when connected to the internet.

King’s stock is trading at $16.17with a market capitalization of $5.20 billion. It touched a high of $23.48 in July this year.

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