At least one developer believes our future is a digital-candies-based economy. Candy Crush Saga developer King is hiring banks to help it pursue an initial public offering (IPO) in the United States, according to the Wall Street Journal.
Candy Crush Saga is one of the most-played and highest-grossing social games on mobile platforms and Facebook. That success is leading King’s executives and its investors to consider taking the publisher public.
“King’s success and growth presents numerous opportunities for the business to develop further, and one option would be to take the company public,” a King spokesperson told WSJ. “However, while it’s an option for the future, we would not comment on when we could consider making such a decision.”
Social-game developer IPOs don’t have a stellar track record. In 2011, Zynga went public with a lot of attention from Wall Street. Zynga debuted its offering at $10 a share in December 2011. After shooting up to $11, the stock quickly shed its value.
Since then, Zynga’s shares have lost nearly 70 percent of their value. It is currently trading at $2.89. That drop is largely attributed to Zynga failing to re-create the success of its games, like FarmVille and CityVille.
King could face a similar issue. Candy Crush Saga is a gigantic success, but the company’s other releases haven’t duplicated that performance. Even with King generating a ton of revenue, Wall Street might not have a lot of confidence in another studio coming out of the volatile social-gaming sector.
[Editor's note: We'll also be talking about what it takes to establish long-term success in mobile at our MobileBeat 2013 event next month in SF, where we're hosting major players to debate what makes a winning mobile experience, from Google, to Facebook, Millennial, Chartboost, Flurry, Tapjoy, HasOffers and many more.]
Apax Partners, a private-equity firm, and Index Ventures, a venture-capital firm, invested nearly $50 million in King in 2005. Both would stand to benefit greatly from an IPO.