Candy Crush Saga : a Business Behind an Entertainment

In the subway, in the bus, in the street, we all have crossed someone playing Candy Crush Saga on their mobile phone.

Released on April 12, 2012 for Facebook and on November 14 as a mobile app for smartphones by the British company King Digital Entertainment, Candy Crush Saga became in just a few months one of the the most successful games in the history of gaming apps.

In November 2013 the game was played by more than 45 million people, all united in the same goal : to destroy colored candies.

The principle of the game is simple. Players must create color combinations with the candies which appear on the screen.

At the beginning of the game each Candy Crush player has five lives. If the player loses them all, the game stops. To recharge lives, it is necessary to wait 30 minutes.

The game is divided into hundreds of levels, with new episodes being added every month. Currently, the game has 1,225 levels in 83 episodes, with 755 normal levels within 51 normal episodes and 470 Dreamworld levels within 32 Dreamworld episodes.

Why is Candy Crush so popular?

Simplicity and accessibility of the game are important reasons but not the main ones.

Candy Crush’s success is based also on the feeling of addiction which it creates among its players. The game is updated regularly, which makes it almost impossible to complete. The level of difficulty is also complex enough to interest them, but also accessible enough not to discourage it. The most important principle of the game is to freeze it when the player has lost his 5 lives. Quite frustrating but efficient!

Just a few months to get to the top.

In May 2013 Candy Crush became the most downloaded game for the smartphone on the Google Play platform and the App Store. A few months later, AppAdvice.com announced that Candy Crush developer King “was making $ 633,000 per day, earning upwards of $230 million annually”.

The key to the success

Actually, there are no secrets, just an efficient business-model. King company was able to turn its players into consumers by making of Candy Crush Saga a “freemium” app. It means that Candy Crush is free to download and play, but its users purchase extra moves, lives, levels and power-ups. The company has developed a business model around this game, which is mainly based on micro-payments. Therefore, the addiction to the game has led players pay money for a virtual life, to continue to play.

The success of the game didn't prevent the downfall of its stock on the NYSE

 

The fact that the turnover of King Digital exploded last year (1000%) to about $ 2 billion is quite phenomenal. But the downside of this phenomena is that almost 80% of its revenues come from one game : Candy Crush Saga.

 

Although King Digital is aware of this weakness and despite the interventions of its CEO to highlight the uniqueness of its business model based on a wide range of games, the markets and its investors didn't believe him. They are not wrong because in a market as competitive as that of games for smartphones nothing is predictable.

In the same way, this incertitude was detected on Wednesday March 26, 2014, when King introduced its shares on Wall Street, on the New York Stock Exchange. From the first hours of trading, shares in “KING” immediately dropped by 9% and finally plunged by 15.56% on the session to 19 dollars, well below its initial price of 22.50 dollars.

Finally, this level values the entire company at 5.98 billion dollars far from the initial figure of 7.6 billion.

The company responsible for one of the biggest mobile games in the world crashed on the stock market. 

Business is an unpredictable world, where we can meet success and failure, but where we must remain strong. King digital entertainment is trying to follow this principle and is now « preparing for Life after Candy Crush”. 
If you are interested in the subject : http://www.businessweek.com/articles/2014-11-07/king-prepares-for-life-after-candy-crush

Evguenia A.