Casual games firm King, whose Candy Crush Saga has become a mobile phenomenon, has filed for an initial public offering that could reach US$500 million in value.
The company is to list on the New York Stock Exchange as King Digital Entertainment, filing to go public with an F-1 form published through the US Securities and Exchange Commission’s Web site.
King’s filing reveals the Candy Crush effect in stark detail: In 2012 the company’s revenues were US$164.4 million and its net profit US$7.8 million, but last year those figures rose to US$1.88 billion and US$567.6 million respectively.
In December last year, King’s games averaged 128 million daily active users, although 93 million of those were playing Candy Crush Saga — a long way ahead of other games Pet Rescue Saga (15 million daily active users), Farm Heroes Saga (8 million), Papa Pear Saga (5 million) and Bubble Witch Saga (3 million).
King averaged 408 million monthly active users in the final quarter of last year, the filing said, adding that its games have been installed 500 million times on mobile devices, and that 73 percent of its gross bookings revenues last quarter came from mobile players.
The filing also reveals that King’s games were installed on mobile devices more than 76 million times in December alone, and played around 1 billion times a day that month. King averages 12 million monthly unique payers for its games, meaning that 3.7 percent of its players in any given month are paying to play, versus playing for free.
Investors will be keen to understand whether King is more than a one-hit wonder. Candy Crush Saga alone accounts for 78 percent of its players’ spending, for example.
They may also be concerned about a drop in King’s quarterly revenues from US$621.2 million in the third quarter of last year to US$601.7 million in the fourth quarter, as its number of monthly unique payers fell from 13 million to 12.2 million as a result of “the seasoning of our older games in certain markets among our more occasional customers,” King said.
The company was founded in 2002 as Midasplayer.com, initially making its name from skill-based Web games, before moving into Facebook social games in 2011 and then mobile games in 2012.
Going public will be a lucrative affair for the company’s founders: It has only raised US$9 million of funding since it was founded in 2002. The company has recently been in the news for criticism of its approach to trademark filings and suggestions that several of its games have copied older titles.
The company’s initial public offering comes at a time when the revenues continue to roll in from Candy Crush Saga.
“The opportunity in front of us is exciting: mobile usage is exploding and games are commanding the lion’s share of time spent,” King’s filing says.
“We have a substantial cash position and no debt and we have been cash flow positive since 2005. Going public creates a liquid market for our current and future employees and equity holders and will give us greater flexibility to act on strategic opportunities if they arise in the future,” it said.