The Company Behind Candy Crush Saga Valued at AU $8.5 Billion – Will the IPO Succeed?

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By Sachin Trivedi | March 14, 2014 3:33 PM EST

King Digital Entertainment the company that created the popular game Candy Crush Saga is going in for an IPO with a valuation of AU $8.5 billion. Will the valuation and share price succeed? Or will we see a repeat of Facebook?

Reuters
A woman poses for a photo illustration with an iPhone as she plays Candy Crush in New York February 18, 2014. REUTERS/Carlo Allegri

Casual gaming, especially on mobile devices like smartphones and tablets, is on the rise. Candy Crush Saga is one of the dominant players in the market. The game has the ability to keep the player engaged for a long time.

Many players choose to play free to play games. Candy Crush Saga is free to play with the option of getting something extra for users who wish to spend some money. This model has helped the company generate over $500 million in reported profits in 2013 at a time when many of the other companies with a free to play model are struggling to make money.

Some experts are worried that the company is overly dependent on Candy Crush Saga for revenues. The company however has some other popular games in its portfolio although none of them are as popular as Candy Crush Saga.

Candy Crush Saga has 97 million daily average users according to the company, making it the top game. It is followed by Farm Heroes Saga with 20 million daily average users, Pet Rescue Saga 15 million, Papa Pear Saga 5 million and Bubble Witch Saga with 3 million daily average users.

The IPO is offering 22.2 million shares with a share price ranging from $21 to $24 putting the value of the firm at AU $8.5 billion. The company plans to list the share in the New York Stock Exchange with a ticker symbol KING.

It must be noted that Facebook faced some problems with its IPO with a share price of $38. The stock had started to fall in the stock market after getting listed. The share price of the company has surged ahead recently and is currently trading over $68.

One key factor for King Digital Media Entertainment company is the player retention. Many games tend to be fads and tend to lose users to the next more popular game very quickly. However what makes this company stand out is that it currently has reported monthly unique users of 324 million and 41 billion gameplays.

With the popularity of games like Candy Crush, massive customer base and high profitability analysts expect the company to do well at the IPO. However the future of the gaming industry is difficult to predict and the company may have to come up with a few more blockbuster games in order to sustain growth.

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(Photo: Reuters / )
A woman poses for a photo illustration with an iPhone as she plays Candy Crush in New York February 18, 2014. REUTERS/Carlo Allegri
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