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Tue February 18, 2014
Maker Of 'Candy Crush' App Files For I.P.O.
“Candy Crush Saga,” the addictive smartphone game, is no longer just looking for gamers — it wants investors too. King Digital Entertainment, the European gaming company behind the game, filed for an initial public offering today.
Jason Bellini of The Wall Street Journal joins Here & Now’s Meghna Chakrabarti with details.
- Jason Bellini, video reporter and senior producer for the Wall Street Journal. He tweets @jasonbellini.
MEGHNA CHAKRABARTI, HOST:
From NPR and WBUR Boston, I'm Meghna Chakrabarti. It's HERE AND NOW.
(SOUNDBITE OF MUSIC)
CHAKRABARTI: Now, I'm betting that music sounds familiar to some of you, if not a lot of you, because the smartphone game "Candy Crush Saga" has 128 million daily active users. That's a lot. And now, the makers of the game are looking for investors. King Digital Entertainment filed for an initial public offering today. And here to explain is Jason Bellini, reporter for The Wall Street Journal. Actually, we don't have Jason Bellini at the moment.
So I'll tell you a little bit more about "Candy Crush Saga," which was created by, as I said, King Digital Entertainment. The filed for an IPO today. In 2011, before "Candy Crush Saga" launched, that company had only generated $64 million in revenue. But last year, after one year of "Candy Crush Saga" going viral, the company generated some $1.8 billion. So a huge growth spike there in just a little while.
I understand we've got Jason Bellini on the line now. Jason, are you there?
JASON BELLINI: I'm here Meghna.
CHAKRABARTI: Were you playing the game? Is that why you weren't there? I've heard it's quite addictive.
BELLINI: Busted, yes.
BELLINI: This game is so addictive, yeah, I know. It's more fun to talk in the radio, that's for sure.
CHAKRABARTI: No, I'm just kidding. Technical difficulties do intervene as well. We've got gremlins every now and then. But first of all, tell me why - what's behind the popularity of "Candy Crush Saga."
BELLINI: Well, I mean, this game is a phenomenon. I mean, "Candy Crush Saga" has been leading the top-grossing game charts. It's one of the most frequently downloaded free apps from iPhone's app store and Google Play. The reason why - I mean, it's colorful. It's addictive in its puzzle game. And the way you play this, you know, there's just clear rows of candies or jellies, and you have to bring them down to get special ingredients through the candy rows. A little too complicated to explain, but it's really quite simple.
Now, this game launched on Facebook in April of 2014, and it really took off last year. It's - one of the reasons is it's very convenient to play. By starting into your Facebook account, you can view the progress of your friends who are playing the game, and you can track their progress. On the level map, you can track their scores. You can even ask your friends for help. So it's really a social experience.
CHAKRABARTI: Right. Social but what about the financial side of things? I understand that even though it's had 500 million downloads, only 4 percent of players regularly spend money on the game. So, you know, what's the company that wants this IPO telling people? How do they make money?
BELLINI: Well, they kind of nickel and dime you as you're playing this game. You make a small payment for bonus items and boosters from time to time that you're playing. As I've said, you know, it's so addictive that it's hard to get to the next level - to the higher levels without these boosters. So when you reach these levels, your addiction is so high that players are willing to shell out money to buy credits and other boosters or - and to pay, you know, another 99 cents to buy another life rather than going to have to start all over again and...
CHAKRABARTI: Right, nickel and dime ends up being a billion-dollar business for King Entertainment. But in the last minute we have here, Jason, here's the big question: People remember Zynga, the company behind Farmville, IPO'ed in 2011, huge news. But since then, share price has fallen by, what, 50 percent. Gaming is a very fickle industry. Why do we think King Entertainment can be different, if at all?
BELLINI: Well, you know, the (unintelligible) is very instructive. The company has been posting losses for the last three years. The value of its shares plummeting, as you point out. But with King, the company hasn't decided an IPO price, and it's really waiting to hear back from investors. It's hoping to take its value at $8 billion to $10 billion, you know, when investor predict the next year's earning. But their real hope is that because it's social, because it's, you know, they have the success on the Facebook platform, that that's really going to be what differentiate it. But they will be facing investor questions about how to deal with the fickle taste of mobile dealers(ph).
CHAKRABARTI: Right. Jason Bellini, reporter for The Wall Street Journal and a good sport despite our technical gremlins. Thanks so much, Jason.
BELLINI: Thank you.
CHAKRABARTI: This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.