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Social-game publisher King, creator of the highly addictive Candy Crush Saga, just priced its IPO at between $21 and $24 a share — up to a $7.6 billion valuation. King claims this will leave it with approximately $326 million in capital, after transaction costs, for corporate purposes and acquisitions, reports French news agency AFP. While this valuation is new, the IPO filing is not; London-based King announced its plans to go public nearly a month ago, and at the time the firm planned to raise up to $500 million.

King is one of the top publishers in the $16 billion mobile-gaming market. That sector is growing due in lare part to games like Candy Crush Saga. King’s revenues have grown tremendously thanks to puzzler, which has players trying to match three identical candies to score points. King earned $568 million in profit on revenues of $1.88 billion in 2013, and Candy Crush Saga — the top grossing iOS game of 2013 — is the driving force behind that. It w

The publisher does have other hits, but none that can keep up with Candy Crush. While the sugary megahit has 93 million daily active players (DAUs), the next closest King game, Pet Rescue Saga, only has 15 million daily users. This puts King’s valuation on potentially tenuous ground. In fact, the the company’s revenues declined from $621 million during Q3 of 2013 to $602 million in Q4, and it attributes that to “a decrease in Candy Crush Saga gross booking.”

King will have to prove that it can reproduce the success of Candy Crush Saga if it hopes to overcome the stigma that may surround social-gaming companies. In 2011, FarmVille publisher Zynga went public with a lot of buzz, but its share price quickly fizzled out.

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“Much like the social-gaming sector, the mobile market can be just a volatile,” EEDAR vice president of insights Jesse Divinch told GamesBeat last year after rumors of the King IPO first surfaced. “Success with one game — or even a few — doesn’t mean it is sustainable long-term, as we’ve seen with Zynga.”

King’s advantage is that it is fully integrated on mobile platforms where the Farmville producer was reliant on Facebook for the bulk of its income. Of course, Candy Crush Saga is also now the No. 1 game on that social-networking site as well.

 

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