Kyle Nalepa ~ Timea Domokos ~ Angela De Leon ~ Megan Reardon

The History of King• Founded in August 2003 by

Ricardo Zacconi, Sebastian Knuttson, Lars Markgren, Toby Rowland, Thomas Hartwig, and Patrik Stymme under the name Midasplayer.com.• Founders worked together

previously at uDate.com, Spray Network, and Fjord Network.• Portfolio is focused on

tournament-style skill games played on the web.

Important Dates• September 2004: Launch of Multiplayer 8-Ball Pool and 9-Ball Pool games• January 2005: Milestone of 15 million game plays and $3 million in

prizes• September 2005: Apax Partners and Index Ventures invest in

Midasplayer.com• November 2005: Rebranded to King.com• January 2007: Milestone of over 80 million game plays in the month

Milestones• October 2011: Top 10 developer on Facebook,

milestone of over 1 billion game plays per month• April 2012: Launch of Candy Crush Saga on Facebook,

milestone of over 10 million daily active users on Facebook• May 2012: Milestone of 3 billion game plays in the

month

Recent Triumphs

• June 2012: Milestone of 40 million monthly unique players• November 2012: Launch of Candy Crush Saga on mobile• January 2013: Candy Crush Saga #1 Facebook game with

over 10 million daily active users• February 2013: Milestone of over 9 billion gameplays and

80 million monthly active users

King Today

• London-based company• Developer of

casual, social puzzle games • Currently best

known for Candy Crush Saga

The 4 P’s of King

• Product: Casual, social puzzle games• Placement: The Web,

Facebook, and smartphones • Price: Free to download and

play, optional in-app purchases• Promotion: Facebook “likes”

and ads, word-of-mouth, trade shows, conventions, cross-product promotion, merchandising

Free + Premium = Freemium

Freemium defines the business model for a free digital commodity, such as a game, that requires users to pay for advanced features, functions, and virtual items.

Digital distribution of games is not free, but it is more valuable for King to offer games for free.

The “penny gap” theory explains that free is an individual market, and that any other price, even one cent, is an entirely different market.

Innovation: when a company identifies these price trends and gives their products away for free, their product can go viral!

King’s Candy Crush Saga Goes Viral

• Candy Crush Saga has 132.4 million monthly players who spend an average of $33 per year on in-app purchases.

• Industry experts speculate that King generates $633,000 every day, and will produce $230 million this year, on Candy Crush Saga alone.

• King abandoned all advertising within its games in June 2013, and all revenue is earned entirely through microtransactions.

Criticisms of King

• One player complained that “game design used to be about creating fun . . . now it’s about creating frustration.”

• The author of The Ethics of Video Games, Miguel Sicart claims that this type of game is “designed to create a shallow but rewarding compulsion loop, and makes the player pay to stay in the zone where that compulsion is satisfying.”

• Gaming research and virtual economist, Ramin Shokrizade states that there is technology available to game developers which flags players who yield to in-app purchases as “spenders.”

Freemium is a Success for King

• Professor of Media Art, Karen Schrier, defends King by stating that all companies want to earn a profit by producing a desirable product, and that it is common practice to use psychological strategies to promote sales.• Regardless of King’s alleged ethical issues, there is no doubt

that the company has created a mega-hit game that generates revenue based on the freemium business model.

King’s Value Proposition

King provides quick and easy games at zero up front cost that are accessible virtually everywhere and to everyone.

• Accessibility• Affordability• Quality

King’s Marketing Funnel• Awareness: Facebook,

word-of-mouth, TV commercials, digital advertising• Consideration:

Downloading free games onto a mobile device or visiting King.com or facebook.com to play games• Conversion: Making an

in-app purchase

King’s Marketing Strategy

• Free to download• Games are easy to

learn and to play• Crosses platforms,

such as operating systems and devices• Progress is

synchronized on multiple platforms through the cloud

King and Facebook

• In September 2011, King made the move to Facebook with the release of Bubble Witch Saga.• The goal of the move was to expand

into the social market, which led to globalization of the company’s games.• Candy Crush Saga is the #1 game

on Facebook, with an estimated 50+ million daily users as of September 25th, 2013.

King’s New Releases

• Papa Pear Saga: A physics-based game in which the player attempts to have the pear hit as many objects as possible and land in a barrel to advance to the next level.• Farm Heroes Saga: A game in which the player helps animals

defeat an industrial raccoon, who is attempting to turn organic farmland into industrialized land.

Porter’s 5 Forces Affecting King

• Industry Rivals: EA, Zynga• Potential Entrants: Any mobile

gaming company or existing traditional gaming company, that wants to expand into the social market.• Substitutes: Other smartphone

activities such as browsing the web, listening to music, texting with friends, and posting on Facebook and Twitter. • Buyers: Any social media and internet

user, between ages 8-80• Suppliers: Investors, programmers,

and designers

King’s Mobile Industry Rivals

• Smartphones: Android: King holds the 5th spot for free apps, and is the 1st and 2nd most downloaded game app. Preceded only by Facebook, Pandora, and Instagram.

• iPhone: Candy Crush Saga is #7, and the 4th most popular downloaded game app.

• “[King] has pulled off a trick Zynga has largely failed to do, pulling in players from the desktop world who are getting a favorite game on their smartphones for the first time.”

-Dan Rowinski, readwrite.com

Candy Crush Saga Revenue“Candy Crush also brought in the most

revenue of games in the App Store for the month while coming in second in Google Play. The top charts within the App Store and Google Play themselves have listed Candy Crush at or near the top for almost all of 2013.”

-- Dan Rowinski, readwrite.com

King’s Competition on FacebookAs of September of 2013, Monthly Active Users (MAU) of top Facebook gaming apps:

1. King - 248 M

2. Zynga - 117 M

3. Social Point - 48 M

Top 3 Facebook Gaming Apps1. King: 15 apps total 3 apps in top 10: Candy Crush Saga, Pet Rescue Saga, and Farm Heroes Saga. 6 apps in top 100: Papa Pear Saga, Bubble Witch Saga, and Pyramid Solitaire Saga

2. Zynga: 101 apps total0 apps in top 10. 17 apps in top 100: Farmville 2 , Texas Hold ‘Em, and Words with Friends

3. Social Point: 21 apps total1 app in top 10: Dragon City3 apps in top 100

SWOT Analysis

• Strengths: Ability to produce games efficiently, reliable method to forecast hits, profitable transaction model, high microtransaction rate, effective utilization of social media, availability of games across platforms, simple and popular games, and use of cross-promotion

• Weaknesses: Sustainability of an ad-free model, only one style of game, game production limited to 3 months, production teams limited to 3 people, heavy reliance on Facebook, reliance on hits, high ratio of non-hits to hits

• Opportunities: Merchandising, expansion into traditional gaming consoles, version for smart TVs, and TV shows

• Threats: Rival developers, short life span of games, growing distaste for microtransactions, any other entertainment app, and the expansion of Facebook into social gaming

King’s Opportunities

• Find new ways to generate revenue other than microtransactions • Expand into merchandising,

such as a board game, school supplies, or real Candy Crush Saga candy• Create a console game• Create a version for smart

televisions• Make a TV show for kids with

cross-promotion for the game (code for free level, based on the episode)

SourcesSlides  2-6

• http://about.king.com/about/company-history  

• http://about.king.com/news/press-kit/riccardo-zacconi-bio

•  http://about.king.com/news/press-kit/sebastian-knutsson-bio

•   http://www.linkedin.com/in/markgren

•   http://www.mangahigh.com/en_us/about/meettheteam

•  http://linkd.in/16a7hUg

Slides 8-11

• http://www.wired.com/techbiz/it/magazine/16-03/ff_free?currentPage=all

• http://www.uproxx.com/webculture/2013/07/candy-crush-saga-is-earning-633000-a-day/

• http://techcrunch.com/2013/06/12/king-quits-advertising-since-it-earns-so-much-on-candy-crush-purchases/

• http://www.businessinsider.com/candy-crush-saga-addiction-2013-7

• http://money.msn.com/now/post.aspx?post=ab93a88c-adfb-45bc-b7a5-2cfde7a5e1b2

• http://business.financialpost.com/2013/07/30/candy-crush-saga-why-you-play-and-why-you-pay/?__lsa=c830-2103

Sources Cont’d.

Slides 14-16

• http://www.forbes.com/sites/tomiogeron/2013/03/26/how-king-com-zoomed-up-the-social-gaming-charts/

• http://www.forbes.com/sites/johngaudiosi/2013/01/17/king-com-exec-alex-dale-explains-how-they-dethroned-zynga-in-facebook-games/

• http://www.youtube.com/watch?v=Nu48nDKhAzc\

Slides 18-21

• http://thinkgaming.com/app-sales-data/2/candy-crush-saga/

• http://readwrite.com/2013/07/01/candy-crush-saga-king-com#awesm=~oj7F0FIzghs0BW

• http://www.huffingtonpost.com/2013/07/08/candy-crush-addict-reward_n_3561658.html

• http://appdata.com