King Digital Entertainment Plc, creator of the ever popular Candy Crush game app, recently went public this year. As this addictive game generated $1 million per day for the company towards the end of last year, this company is not surprisingly doing better than other game app companies. However, while the company does have approximately 100 million people playing Candy Crush each day, one has to wonder how long these people will continue to play the game.
How Does Candy Crush Make its Money?
In essence, the game Candy Crush makes money by selling “turns”. When playing this game, one only is given a certain amount of turns. When these turns are all used, you have to wait twenty minutes to play again. However, if you pay a small fee, you can resume playing right away. It is this system that makes Candy Crush as much money as it currently does.
What do the Analysts Say?
Very recently, nine research companies gave the game maker a positive rating while only one firm gave King a neutral rating. In fact, one analyst Lloyd Walmsley, a research analyst at Deutsche Bank stated that the company’s game installations on its mobile devices will increase from one billion game downloads today to $3 billion downloads in 2016.
Walmsley also pointed out that King has created games across different platforms that include Facebook, mobile devices, and desktops via Royalgames.com. Moreover, he also stated that King has the ability to spend a great deal of money for marketing in areas that include China, South Korea, and Japan.
Will King Continue to Be Successful?
One has to wonder if Candy Crush will continue to be this successful. For instance, is it possible for this company to continue to create games as addictive and successful as Candy Crush? One must keep in mind that this space in incredibly competitive and that current Candy Crush players may tire eventually tire of the game and move on to the next big thing.
Another important factor to take into consideration is King’s operating expenses. In 2013, the company employed 665 employees while in 2011 the company only employed 144 employees. Thus, King’s operating expenses are much higher than they were only three short years ago.
