King, the developer behind the mobile match-three phenomenon Candy Crush Saga, reported decreased profits and sales for 2015. Its full-year profit fell 10% to $517 million, and revenues fell 12 percent to $2.0 billion.
King attributes the drop to several factors in a press release, particularly the declining popularity of its best-known franchise. "The year over year decreases in both gross bookings and revenue were primarily due to lower gross bookings from our more mature games, in particular Candy Crush Saga."
The press release also states that part of Candy Crush Saga's declining profits are padded by increased gross from newer releases like Candy Crush Soda Saga, though nothing King has released to date can touch the popularity of its original Candyland vacation.
In case you've forgotten, Activision Blizzard bought King for $5.9 billion late last year. Activision Blizzard surely hasn't forgotten, though the acquisition doesn't close until later this month.
Obviously, such a huge transaction isn't as simple as Activision Blizzard handing King and check and saying "here you go." The Motley Fool has an excellent breakdown of the purchasing process, though it still comes down to one fact: On the surface, it looks as if Activision Blizzard spent a lot of money on a peppermint-striped one-trick pony.
Mind, it's not entirely fair to say King's only success is Candy Crush Saga. The company's output is impressive, and some of its older games, like Pet Rescue Saga, still have a lot of people playing them.
King's high rate of output, however, may be what's hurting them -- and it should be what Activision fixes as soon as it's in charge.
The majority of King's catalogue is puzzle games, particularly match-up games with a twist or gimmick. The recently-released Scrubby Dubby Saga, for example, has you swipe entire rows and columns of game pieces to make matches in lieu of swapping single pieces. In the end, though, you're still matching up three-of-a-kind to score points.
Match-up games are relatively easy to make in a short span of time, which means they can be banged out one after the other. Problem is, that means people get bored more quickly, which means King has to keep releasing new games at a faster pace, and the dance slowly but surely begins spiraling into a pit.
To complicate matters, many of King's later releases -- especially titles in the Candy Crush series (including Candy Crush Soda Saga and Candy Crush Jelly Saga) -- jack up the difficulty within the first ten stages or so. The odds suddenly become stacked against you, and you're asked to meet high goals within a pitiful number of moves. You can try again and again, though King obviously hopes you'll crack and spend real-world cash on power-ups and extra turns.
If you tallied up the number of match-up games I've reviewed in my lifetime, then tallied up the number of times I've hugged my cats, the total for "games played" would encircle the number of "cats hugged" several times. And I hug my cats a lot. Point is, I know when I'm getting ripped off by a free-to-play game.
And something tells me King's old fans are getting wise to the scheme, too. King might get a few desperate bucks from these people when a new game launches, but they inevitably smarten up. One of the smallest, easiest, but most vital things Activision Blizzard can do when it's in charge is re-balance these games.
Activision Blizzard will have to diversify King's mobile output, too. It obviously bought King to immediately bolster its small mobile library, but it's becoming very clear that Candy Crush alone isn't worth a cool six billion. At least expanding into new genres shouldn't be a problem: A small card game called Hearthstone demonstrates Activision Blizzard knows a little bit about making appealing mobile games.
Despite Candy Crush's flagging relevance, Activision Blizzard should do OK with its acquisition if it remembers what Shigeru Miyamoto said about casual gamers being fickle. People don't play Candy Crush Saga because they're loyal to King and its brands (though Hearthstone's association with Warcraft certainly doesn't hurt it). They crush candies because it's a fun way to kill time in a slow bank line.
But casual / mobile gamers aren't stupid, either. You can't rip them off, and you can't repackage the same idea over and over and expect anything other than diminishing returns.