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Five Key Stats from the King IPO

Today King.com, the creator of Candy Crush Saga filed an IPO and released a ton of really interesting information about their freemium…

Five Key Stats from the King IPO


Today King.com, the creator of Candy Crush Saga filed an IPO and released a ton of really interesting information about their freemium games business. Until now, most folks in the mobile games industry have only been able to speculate on their numbers, so this is an incredibly interesting release. These were my key takeaways upon looking at their numbers, put into perspective with other industry knowledge.


  1. They have 128 million Daily Active Users (DAU).
    This is an insane number. When we look at many of the top grossing titles, we’re talking about games with considerably lower user bases, ranging between 1 million and 5 million DAU. Even Zynga at its peak had just 72 million DAU. King is clearly operating at a much higher scale than we are seeing with other companies, and most importantly, they are doing it profitably. For comparison, Supercell (which runs Clash of Clans and Hay Day) had 8.5MM DAU across both titles last year.
  2. They make $0.056 in Daily Average Revenue Per User (DARPU).
    King is not running a high revenue per user business. Contrast this against many of the “midcore” titles like Kingdoms of Camelot or Rage of Bahamut. For example, Rage of Bahamut was once estimated making a DARPU of over $0.60. Even the smaller DARPU games with wider reach, like Clash of Clans and CSR Racing likely make over $0.10 per daily active user.
    It’s impressive that King can maintain this kind of revenue per user for so many users, but it does cut into their ability to ad spend profitably as they require much higher retention and social engagement numbers to make up for their players’ low spending habits. It also creates significant risk, as any game’s success for them relies upon becoming a mass market hit, rather than a highly monetizing title with a niche audience.
  3. Candy Crush Saga comprises 75% of their DAU (93MM).
    It may not be a one-hit wonder, but everything is a halo effect around Candy Crush. This is obviously going to be an ongoing concern for them. Even their other “big” games, Pet Rescue Saga and Farm Heroes Saga have “just” 15MM and 8MM DAU respectively. While these DAU counts are low comparative to Candy Crush, keep in mind that Pet Rescue’s 15MM DAU at $0.056 DARPU is still $840K/day, and Farm Heroes clocks in at $450K/day. So, it’s clearly nothing to sneeze at. That said, future growth and profitability for them may require King to be able to figure out a way to diversify their user base a little bit better. They will also need to figure out a way to build non-Saga games if they want to continue to grow — otherwise their user acquisition rates will only increase in cost as they continue to saturate the market.
  4. They made $1.9 billion in revenue last year.
    That’s a pretty insane amount of money for a company with 665 employees. That’s $2.9 million dollars per employee on staff. Contrast that to Facebook’s revenue per employee, at $1.1MM, and Zynga which is $439K/employee. It’s pretty astounding, and shows they are in another league when compared to most mobile developers.
    When looking at the free-to-play industry as a whole, keep in mind that this is also more revenue than the microtransaction revenue of League of Legends, World of Tanks, Team Fortress 2, Counter-Strike Online and Dota 2 combined. That’s a scary number to contend with, and shows just how much bigger the mobile market is than the PC F2P business (despite the fact that PC games typically require much bigger teams). Plus, unlike Zynga’s rise, they were able to do it with $570MM in profits last year (44% EBITDA margin).
  5. They spent $377MM on marketing and sales last year.
    As far as I know, this blows away the competition. That’s about 20% of their overall revenue. That means that their funnel of new players is huge. If they are able to buy users at a little better than industry average, say $2.50/user, that’s 150MM new users acquired last year. We have no idea what their actual CPI is — it could easily be much higher because of their volumes — but regardless they are able to acquire more users than most games can hope to get in their product lifetime.
    If they were not able to acquire users profitably (see: Zynga), this could be a big problem, but the fact that they’re still able to spend this much and rake in large profits means that they’ll be able to continue replenishing their funnel. And if they ever decide to reappropriate some of that cash into game R&D or acquisitions, they can do that too.

It’s going to be really interesting to see how the King IPO plays out, and they list a number of big Risk Factors. That said, King releasing their numbers publicly shows exactly how high up on the freemium food chain they are, and just how far others have to go to catch them.