CEO Riccardo Zacconi on Why King’s IPO Isn’t Sour Candy
The name of King Digital Entertainment’s next production could be called Damage Control Saga.
The company behind Candy Crush Saga, whose shares sunk below its opening price of $22.50 by more than 10 percent to as low as $19.51 on the New York Stock Exchange on its first day of trading, raced to reassure investors that it is more than a one-hit wonder.
In an interview with Re/code, King CEO Riccardo Zacconi reaffirmed that the company’s previously announced goals of building out a portfolio of new titles will bring value to shareholders. It’s an important bit of strategery, because 78 percent of King’s revenue comes from Candy Crush Saga and it’s unclear if it can capture lightning in a bottle again.
There’s an added bit of urgency because that revenue dipped 3 percent last quarter, “driven by a decrease in Candy Crush Saga gross bookings,” according to an SEC filing.
Zacconi said the company still plans to use its tournament-gaming site RoyalGames.com as a testing ground for new titles, and that users of the site are a good focus group for King players on bigger social and mobile platforms.
“If you look at our user base as a pyramid, the users on the tournament platform are at the top of the pyramid,” Zacconi said. “They’re 70 percent female, 25 to 55, and play many more games than the average player.”
By tracking the portfolio of games those RoyalGames players play and how deeply they get into them, the company can determine what “qualifies to be a Saga game,” he added.
A common question this morning is whether King’s IPO will be Zynga all over again. Zynga, you might recall, rose initially in late 2011 and early 2012 before a precipitous fall from which it is only now starting to recover.
Zacconi said King, unlike IPO-era Zynga, has “cracked mobile reach and mobile monetization. By doing so, we have the largest network of players in the mobile space.” Internal metrics have shown that the number of players in that network who play more than one game is growing, he noted.
He said another key difference is cultural, and that the key for King right now is to keep its head down and focus on the games.
“The moment when we think we are the best is the moment when things go wrong,” Zacconi said. “So we have to be humble and focus on executing.”