King Digital Entertainment isn’t just a “one and done” story when it comes to the mobile market, even if Candy Crush Saga continues to be its nest egg.
Following a skeptical investment in an IPO back in March with a public offering, the company has since seen a turn-around since its traumatic first day, when it dropped 16 percent on the opening day of trading. The company has now managed to rise above its IPO price of $22.50, for the first time since it listed earlier in the year. It has also managed to outlast other tech selloff companies, including Twitter, Amazon, Facebook and Pandora, as well as mobile rivals like Zynga, the creators of Words With Friends.
Plus, the company is diversifying its products past Candy Crush Saga, offering up other addictive affairs, such as Bubble Witch Saga 2 and Farm Rescue Saga. “We believe it is becoming increasingly clear that King is successfully diversifying beyond Candy Crush,” wrote Piper Jaffray’s Michael Olson in a note to clients earlier this week. Bubble Witch specifically has managed to climb into the top 20 grossing iPhone games, providing confidence that “the company has created a formula for successful new and follow on game launches.”
King’s business will also continue to rise, thanks to a partnership deal with China’s Tencent that will allow the distribution of its games to a whole new market, thus providing an even bigger financial opportunity with optional in-app purchases. Heavy TV advertising in Japan and elsewhere appears to be paying off for the mobile giant, leading to continued engagement with Candy Crush Saga and boosting new titles like Pet Rescue Saga.
Although some investors don’t believe the shares will rise any higher, it’s clear that King is a company that’s yearning to stay, well, king of the market.
Source: Quartz
