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Mobile game commercialization challenges of clutter, customer acquisition and working business models successfully overcome by King, Kabam and Supercell
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Mobile Games?
2010
2009
2008
2006
2005
2004
2007
2014
2012
2011
The History -- Mobile Games10 Years
2004•Jamdat files IPO
2005 ** avg price $2.99 -$9.99•Jamdat acquired by EA
2006 2007 ** iPhone launches, avg price drops to $.99
•GLU Mobile files IPO
2009
2011
2008
2010• Ngmoco acquired by DeNA
• Hands on Mobile closes
2014
• King files IPO March 2014
2012** Avg price FREE
$2.4B sales / $681M profits
$46.2M sales / $12.4M losses
$28M sales / $3M profits
July 2014 – Alibaba invests $120M in Kabam, giving Kabam a valuation of $1B
March 2014 – Rovio cancels planned IPO
Jan 2014 – Kabam announces $360M in sales for 2013
$46.2M sales / $12.4M losses
2014 – COA $2.73, ARPU $ 1.96
Drowning in Apps
Freemium Dominates
Mobile Cost Per Install
Houston we have a problem . . .
Top Grossing Games by Platform 8/14/2014
iOS Top GrossingGoogle Play Top Grossing
AppAnnie
King Digital Entertainment and Supercell Dominate Mobile
• King Digital: – Tent pole property: “Candy Crush Saga”, Candy
Crush accounts for 78 % of King's sales & 86% of mobile bookings.
– IPO March 2014– Revenue $2.42B, Net Income $681M
• Supercell:• Tent pole property: “Clash of Clans”• Estimated 2013 sales of $800M
The King Secret Sauce
• Discovery solved . . . huge investments in analytics and marketing drive purchase behavior.
• Cost of acquisition . . . driven down through cross selling portfolio across 100+ titles.
Key Take Aways• OPPORTUNITIES & CHALLENGES: As King, Supercell, and
Kabam clearly demonstrate, there is tremendous opportunity for those who solve the challenges of Discovery, the Business Model & the Cost of Acquisition.
• PRODUCTION: In the Production Process, focus on the end state, and build an achievable, realizable plan to achieve that end state, taking into consideration the impact of both external and internal development on your time lines.
• REVIEW SUCCESSES AND FAILURES: Beware of the “Survival Bias”, look not just at those who have succeeded, but those who have failed and understand why.
• CONTENT IS STILL KING: Focus on high quality content that fills a niche currently not being served.
Links• King F-1 http://
www.sec.gov/Archives/edgar/data/1580732/000119312514056089/d564433df1.htm
• JAMDAT S-1 http://www.nasdaq.com/markets/ipos/filing.ashx?filingid=2998464
• GLU S-1 http://www.nasdaq.com/markets/ipos/filing.ashx?filingid=4784230
• AppAnnie https://www.appannie.com/intelligence/• Kardashian Ranking http://
www.distimo.com/iq/app/apple-app-store/glu-games-inc/kim-kardashian-hollywood
• Developer Economics: http://www.developereconomics.com/reports/q1-2014/
Mobile Games!