How has capitalising on the attention economy

influenced Kings digital success?

Analyzed by

Alastair Ward - Alexander Leighton - Benn Rayner Molly Trumble - Roger Steiner and Sarah Bates

Todays Agenda

1. Introduction

2. Technology trends and adaptability to market

3. User engagement

4. Financial evolution of King

5. Findings

6. Q&A

12 April 2012:

King makes a pivotal decision that affects the future of the company

King Launches Candy Crush Saga on

But lets take it back……

Images courtesy of https://livingtheglutenfreelife.wordpress.com/tag/social-media/ and http://www.businessinsider.com.au/addicting-iphone-games-2013-8#candy-crush-saga-is-an-insanely-popular-puzzle-game-1

1. Introduction

• With more than 190 titled games spanning across 200 countries, King is responsible for Hit micro-games such as Candy Crush Saga, Bubble Witch Saga and Pet Rescue Saga

• According to King, this model of synchronized cross-platform and user-friendly game play encapsulates the idea of bite size entertainment.

• Success in the digital world is not reflected by a financial economy, but instead by the level of attention generated through accessibility or networks

• The reflection on King’s success within these economies involves examination of their user engagement strategies, adaptability to market position and technology trends, and reflective financial analysis within the attention economy.

2. Technology Trends and Adaptability to Market

Accenture Consumer Electronics Products and Services Usage

Report 2013

Accenture Digital Consumer-Tech Survey

2014

Accenture Consumer Electronics Products and Services Usage

Report 2011

(Accenture, 2013) (Accenture, 2014) (Accenture, 2011)

2011 Power Rankings

Accenture,. (2011). The 2011 Accenture Consumer Electronics Products and Services Usage Report.

Intentions to purchase 2011

Accenture,. (2011). The 2011 Accenture Consumer Electronics Products and Services Usage Report.

Consumer reasons for connecting on social network

Accenture,. (2011). The 2011 Accenture Consumer Electronics Products and Services Usage Report.

Planning to purchase in 2013

Accenture,. (2011). The 2011 Accenture Consumer Electronics Products and Services Usage Report.

Who owns what?

Accenture,. (2013). The 2013 Accenture Consumer Electronics Products and Services Usage Report.

"People need innovation in small iterations. One step at a time is how you have to innovate for broad demographics."Tommy Palm, Director of Marketing, King

Sinclair, B. (2013). Candy Crush's recipe for success. Gamesindustry.Biz. Retrieved from http://www.gamesindustry.biz/articles/2013-11-12-candy-crushs-recipe-for-successWeston, R. (2014). FreshMinds - 3 digital trends will drive the gaming industry in 2014. Freshminds.net. Retrieved 9 October 2014, from http://www.freshminds.net/2014/02/three-digital-and-mobile-trends-that-will-drive-growth-in-gaming/

Global Market

Games are services

Free Games

More Screens

3. User Engagement

"People who play Candy Crush Saga on both the web and on the mobile app show nearly twice the level of engagement

compared to users who play on just one platform.” Riccardo Zacconi, CEO, King

Cross platform game synchronization

Likeability plays a large role in user engagement

http://company.king.com/about-us/our-history/

Diversification

Intersection

Extension

How does King cross platforms?

http://www.forbes.com/sites/jaysondemers/2014/02/12/how-to-master-mobile-seo-in-2014/http://www.praxismi.com/content/computer-system-validation-courseshttp://holykaw.alltop.com/california-homeless-and-poor-get-better-access-to-cellphones-and-textshttps://www.facebook.com/

• 70% of users finished the game without payment to further gameplay

• Core demographic is women, aged 25-55

• With the launch of Candy Crush on Facebook, it bought 7 million active daily users, increasing to 93 million active daily users today

600%Massive trajectory of user engagement means Kings ability to maximize the attention economy is substantial, users don’t pay for the game, but money flows to attention.

https://developers.facebook.com/docs/showcase/candycrushsagahttp://candy-crush-saga.wikia.com/wiki/King

User Fast Facts

Brilliant Content

Engaging Stories

Transference of Attention

Capitalization of Attention Economy

3Stepsto engaging users

http://www.newmediastudies.com/economic.htm

Prior April 2012

• Web Based Micro-Gaming• Revenue was earned by applying

The Advertising and Community Business Models

4. The Financial Evolution of King

The Advertising Business Model. Courtesy of http://casettasthoughts.wordpress.com/2012/03/22/low-end-disruptive-innovation-in-web-2-0-2/

Kings market share of the Attention Economy

“Investors value Web companies based on the expectation of how powerful they think those companies will be in the future.”

“Similarly, any website that is well-known and visited by millions of people has a high value simply because that’s a lot of eyeballs to sell to advertisers.”

David Gauntlett, 2004

Courtesy of http://www.businessinsider.com.au/chart-of-the-day-candy-crush-vs-zynga-2014-3

Post April 2012

• Reaches a peak in 2013 with 128 million daily active users

• 324 million monthly unique users• 1,200 million daily game plays• 500 million downloads on mobile devices• 41 billion gameplays in December 2013

The power gain from its success in the attention economy allows King to develop its games across mobile devices which in turn gains a wider more engaged public

King shifts the focus of its business model to

reflect a “Freemium” approach…(United States Securities and Exchange Commission, 2013)

Economic Evolution

“Freemium” is a combination of Free and Premium and describes a business model offering a free core product with the option for the consumer to purchase premium goods/services should they so wish.

Advertisements are seen as a negative externality, detrimental to their ‘Freemium Business Model’ .

• Optioning consumers the ability to purchase extra lives

• Optioning consumers the ability to purchase virtual ‘gems’ as a form of in game currency

• Optioning the consumer the ability to skip the mandatory 30 minute game lockout

King Monetises Candy Crush Saga via In-App Purchases such as:

King Financial Analysis

• King’s focus has shifted from growth to minimizing churn and increasing per-user bookings

• Their IPO timing could be for a number of reasons; early VC’s wanting to recoup their investments, paying down debt or acquisition of capital for future growth opportunities

• This can be seen in King’s recent buyout of Singapore based games developer Nonstop Games.

Q&A