Candy Crush Saga is one of the biggest mobile games ever, so ubiquitous among Facebook users and mobile gamers that the company behind it has pumped the brakes on a planned initial public offering.
According to reporting out of the U.K., King – the developer behind the perniciously addictive puzzle game – had planned to float on Nasdaq before Christmas, seeking a valuation of $5-billion. But now there is a fear within the company that it will be perceived as a “one-hit wonder.”
The private British company has been around for a decade and is reportedly profitable, but in 2013 Candy Crush became a phenomenon on par with Angry Birds, Minecraft and Farmville (you can scroll through the game’s progression from online only to Facebook, to mobile on this colourful interactive timeline). King says its games now record about 1 billion plays a day, up from one billion a month in 2012.
Candy Crush has been downloaded more than 500 million times since its launch in November 2012. The game earns its money through in-game micro-purchases that allow users to buy upgrades, extra lives and skip levels; part of its traction on social networks comes from tools that lets players upgrade for free if they promote the game to friends. Mobile analytics firms have consistently ranked Candy Crush among the most successful generators of in-game purchases, to the tune of $2- to $3-million a day.
So, why slow down an IPO? First, King filed its U.S. SEC paperwork “in secret” using the same loophole for startups that Twitter employed to avoid emptying its bag of financial data in public before setting an IPO date, so there’s no urgency. Also, there’s the lesson of Zynga which launched into the marketplace riding a wave of popularity from Farmville, but has since lost more than half its value as the market bet against its recent failures. As Silicon Valley blog Techcrunch has written, the cyclical success of video game companies makes markets queasy.
And, for all its success, Candy Crush is the company’s only really big game on Apple’s iOS platform. Reports suggest that it wants to release some of the other games it has in the pipeline to prove it can continue to generate hits, at which point a return to the stock market – perhaps at a higher valuation – becomes more likely.