
Candy Crush creator King files for IPO - bevacqua
http://thenextweb.com/insider/2014/02/18/candy-crush-creator-king-files-ipo/
======
mkr-hn
For anyone who missed the CandySwipe post (or wants a refresher):
[https://news.ycombinator.com/item?id=7225945](https://news.ycombinator.com/item?id=7225945)

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grej
Is it wrong that I hope they have a poor IPO due to their attempt to trademark
the word 'Candy'?

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sdfjkl
No. But I'm astonished they're doing this so shortly after making everyone
hate them.

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zwily
Everyone doesn't hate them. The HN and reddit crowds are relatively small. The
"general population" still loves to play Candy Crush every chance they get.

~~~
oneeyedpigeon
This is true. And the uninformed public actually thinks that their victims are
companies that have copied _from them_. Oh, the sad irony.

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downandout
Sounds like 3rd party Candy Crush revenue estimates, which have consistently
hovered around $700K/day, were _way_ off. The filing says Candy Crush is
responsible for 78% of revenue - that's $1.48 billion in 2013. That's more
like $4 million/day.

Makes me wonder how far off third party estimates for other apps are.

Here's an example estimate:

[http://thinkgaming.com/app-sales-data/2/candy-crush-
saga/](http://thinkgaming.com/app-sales-data/2/candy-crush-saga/)

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jackgavigan
I don't think this IPO will progress until after King release their Q1'14
results. Check out this image:
[http://www.sec.gov/Archives/edgar/data/1580732/0001193125140...](http://www.sec.gov/Archives/edgar/data/1580732/000119312514056089/g564433g25d61.jpg)

It shows that the monthly unique payers (MUPs), revenue and profits were all
lower in Q4'13 than they were in Q3'13\. Investors will want to know whether
Q3'13 was the peak (and it's all downhill from here) or whether Q4'13 was a
blip and Q1'14 resumes the upward trend.

Smart investors are wary of one-hit wonders. I heard that Rovio's March 2011
investment round was based on a valuation of 1x revenues. Mind Candy is
working on three new franchises that it hopes will replace Moshi Monsters,
which has seen traffic from the UK and US drop by ~50% over the past year.

Even the dumb investors will have learned from Zynga. Zynga's revenues peaked
at $332.5m in Q2'12 and they've been in decline ever since. Last quarter, they
were $176.36m. See [http://www.statista.com/statistics/276483/zyngas-
quarterly-r...](http://www.statista.com/statistics/276483/zyngas-quarterly-
revenue/)

Zynga's share price was priced at $10 when it IPO'd in December 2011. It
peaked at $14.69 in March 2012 and is trading at less than $5 today.

If King's Q1'14 numbers are lower than Q4'13, I would not expect the IPO to go
ahead. Companies in this space need to demonstrate the ability to repeat the
success of hits like FarmVille, Angry Birds, Candy Crush and Moshi Monsters.

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jscheel
I don't think I'm ready to touch social gaming stock with a 10 foot pole.
It'll probably have a nice bump right after the stock goes public, but I sense
a large crash in its future. The social gaming market is just so fickle.

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Dirlewanger
Ah, another round of crash-and-burn, Zynga style. This will be fun to watch.

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deletes
I'm not so sure. The puzzle matching games are easier to grasp than Zynga's
ville-type games. I'm trying to say that games from King have a lower common
denominator.

~~~
Dirlewanger
They definitely do, yet since Zynga was on top of Facebook, seeing friends
play the game and shoving shit in their face made people play as well. I
actually forgot that we're talking about mobile applications here. Not sure if
Candy Crush and stuff is directly on Facebook...maybe they will be more
successful than Zynga.

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chaz
King booked $1.9B in 2013 revenue in 2013, with $568M in profit and 665
employees. Supercell (which sold 51% to Softbank for $1.5B in 2013) booked
$892M, with $464M EBITDA and 138 employees. Zynga booked $873M in revenue with
2,000 employees, with a $37M loss.

A lot of negativity here, but I think it could be interesting an interesting
business. I wouldn't begrudge anyone who has a massive hit like Candy Crush
and seeing how far the ride can go.

[http://blogs.wsj.com/digits/2014/02/18/king-digital-in-
ipo-f...](http://blogs.wsj.com/digits/2014/02/18/king-digital-in-ipo-filing-
crushes-it-on-revenue-profit/)

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JonFish85
In my opinion (not investing advice!), they're (investors) exiting now via IPO
because their brightest days are behind them. If they're raking in money
without millions of shareholders, why would they IPO? They'll paint a rosy
picture based on recent performance to pull in several billion dollars, cash
out, and move on to the next project. Very, very few game companies make money
in the long run ("long" being 5+ years).

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Consultant32452
Well they've positioned themselves well for the IPO by doing the trademark
grab recently. If courts continue to allow them to assert their dominance I
think they'll continue to make decent money for a while. I would agree that
they're not a long game investment but I think they'll make it over 5 years.

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marvin
I smell a good short. Let's see what level the price is set at and the level
of hype in the market. If investors jump on this like it's going to be the
next Facebook, there could be a great opportunity here.

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adaml_623
I don't think it's a good short because you have no idea if you will have to
hold the position for months or a few years before KING drops. And if it rises
too much in the time before your predicted drop then the margin calls will
bankrupt you.

~~~
antr
As Keynes well said: Markets can remain irrational longer than you can remain
solvent.

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bluedino
Why would anyone buy into this? Didn't Zynga basically ruin social gaming
IPO's?

Will it be different this time, no huge expansion and growth that kills the
company, will they have a couple more hits in store?

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cmart
As of Q4, the average paying user gave them $17.32 per month in Gross
Bookings. And they had $632m of Gross Bookings in the quarter, meaning they
had 12.2m paying users by my count, giving them an average of $17.32/mo each.

12.2m paying users out of 408m MAUs, or about 3% of the total.

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uptown
I know BI content is usually frowned upon, but this isn't a good trend-line
for candy crush search-interest:

[http://www.businessinsider.com/this-chart-is-not-good-for-
ca...](http://www.businessinsider.com/this-chart-is-not-good-for-candy-crush-
investors-2013-11)

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VikingCoder
If I'm willing to contribute $100 to destroying King during or after their
IPO, is there some creative way that I can do it?

I understand the basics of stocks, but beyond "don't buy it," I don't know if
there's anything I can do to hurt them.

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oneeyedpigeon
Any interest in crowdfunding this endeavour so we can _really_ make a
difference?

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nodata
Ah, timing.

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franciscojgo
I was thinking the same. Flappy Bird with Steroids.

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oneeyedpigeon
Except that Flappy Bird doesn't try to scam you for money, and is actually a
game of skill.

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neals
How does King make its games? Is there a single creative Genius that comes up
with everything, like a Sid Meijer or Peter Molyneux kinda person? I would
love to know how they operate.

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ido
Their games tend to mostly be iterations (or clones if you're cynical) of
tries and true successful games that came before and were already proven in
the market.

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alecsx6
They should have submit for trademark the whole name "Candy Crush", not just
the candy word.

