King: Lots of stats, new acronyms and a conversion rate of 4%

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Yesterday, the games industry, and indeed the wider world, was all agog at the news that King was preparing for an IPO on the New York Stock Exchange.

Here are the stats that I gleaned from the regulatory filing.

• Candy Crush Saga has 93 million DAUs
• The other games have impressive DAUs although they are dwarfed by CCS (Pet Rescue Saga: 15m DAUs, Farm Heroes Saga: 8m DAUs, Papa Pear Saga: 5m DAUs, Bubble Witch Saga: 3 million DAUs)
• King has 128m DAUs and 324m MAUs (31/12/2013), an engagement ratio of nearly 40%.
• The 128m DAUs play 1.2 billion games a day. It is not clear if that is 1.2 billion sessions, or 1.2 billion levels.
• 73% of revenue comes from a mobile audience
• King has 12 million monthly payers, representing a 4% conversion rate.
• The company has only raised $9m million and has been cashflow positive since 2004.
• Revenues grew from $64m in 2011 to $164m in 2012 to $1.9 bn in 2013.
• Adjusted EBITDA rose from $4m (2011) to $28m (2012) to $825m (2013)
• GAAP profit jumped from a loss of $0.7m in 2011 to $11.1m in 2012 to $714.3m in 2013.
• One game (Candy Crush Saga) makes up 78% of its gross bookings while three games (Candy Crush Saga, Pet Rescue Saga and Farm Heroes Saga) account for 95% of revenue.
• Marketing expenses rose from $55 million in 2012 to $377 million in 2013, representing 20% of revenue.
• The company has $408m in cash and cash equivalents, and recently paid out $504 million in dividends.
• “Durable” items, which can be used over extended periods of gameplay made up 4% (2011), 13% (2012) and 1% (2013) of King’s revenue, and the company expects this to decline in the future.
• The value of a durable is spread over the lifetime of a gamer in a game (what we call duration) which King estimates as between five and eight months for the top three games.
• Advertising has fallen from 12% of revenue in 2010 to 1% in 2013. King discontinued the sale of advertising in the second quarter of 2013.
• North America represents 55% of King’s activity, the UK is 11% and no other country was more than 10%.

King also likes inventing new acronyms. For example:

• MGABPPU (Monthly Gross Average Bookings Per Paying User), which I think is equivalent to ARPPU is $17.32.
• GABPU (Gross Average Bookings Per User), which I think is equivalent to ARPDAU, is $0.056. That number has fell through 2013, due to “an increase in our active player audience as we target new a broader player base and new markets, which monetize more moderately.”

The reasons for going public, given that the company is swimming in cash, has been cashflow positive for a decade and has recently rewarded investors (who have invested only $9 million, remember) with $500 million in dividends, are hard to fathom. King says in its F-1 filing that going public “creates a liquid market for our current and future employees and equity holders and will give us greater flexibility to act on strategic opportunities if they arise in the future.

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