Behind the numbers at King, Gamevil and Com2uS

hello and welcome to pocketgamer.visit's weekly news digest this is for the week ending the 13th of february 2015. hi i'm john jordan um so this week we're again it's kind of still from this last week well into the financial season where companies are announcing their figures we've got figures from companies all over the world now they've got americans and koreans and japanese and chinese all firing away kind of figures and i thought this week um because there were some interesting trends going on with just a couple of companies i thought i kind of dive into a bit more kind of detail on what was going on with these companies so i've got my little cheat sheet so when i'm looking down that's what i'm doing with my cheat sheet but the first company i thought i'd look at is king so we all know king um for candy crush saga came across saga originally on facebook and then came to mobile and was a really kind of big game changer for king so it announced it uh 2014 figures um and annual sales were uh 2.4

billion dollars um clearly of an enormous amount of money um we just said it from the start and it's king is a very very profitable company just generated 670 million dollars of cash it actually brought back 150 million dollars of shares um it's paid out dividend it's paying another dividend um it's bought another development company for up to 150 million so it's just very cash kind of positive but there's some trends happening with with with king um that we need to look at so so kind of one of them is just kind of how how kind of quarter on quarter um kind of sales are happening so let me check my cheat sheet so um if we look at the booking so they're booking for q4 so q4 is october to the start of october to the end of december 2014. so its bookings were 560 500 586 million dollars and that's kind of how much kind of um revenue was was was generated um people kind of buying currency um now it's kind of interesting that year on year so compared to the

previous 12 compared to the same period of time in 2013 bookings were actually down so that number was actually down seven percent kind of what's happened there is um we all know what's happening candy crush saga um was a massive game but kind of massive games kind of tend to peak and then drop off so kenny crash saga is in a mature phase now um so he had more bookings this time last year um but if we look on quarter on quarter so if we compare the october december quarter to the um july september quarter bookings were then at actually up eight percent so kind of what we're seeing is a kind of a cyclic behavior where kind of um candy crusher kind of peaks and then drops off and then and then um but equally um now the king releases candy crush soda saga which is kind of part of the same franchise so you kind of see these kind of trends happening where you know it drops off um kind of year on year but there's actually kind of growth happening in a more kind of quarter on quarter level and we can kind of see this um partly because king is very nervous um because it's now a stock company you can buy shares in in king's chairs aren't actually doing very well compared to

when it floated but now king actually breaks out what it calls non-candy crush target revenue so that's basically the revenue it has from games that aren't candy crush because canada should be such a large proportion and actually what we're seeing and kind of what the shareholders want to see is that proportion non-candy crush saga revenue is growing very fast so non-county crush saga was 324 million dollars in in the quarter um and that's actually up 23 kind of quarter quarter so we're kind of seeing that kind of king is kind of showing people that it can actually sustain the candy crush franchise with releasing kind of other games but equally it's kind of got other franchises that aren't candy crush they can kind of have that revenue um generation of and obviously needs to see growth in that as well but kind of behind those we've kind of seen some other trends so ken king originally mainly made its money from facebook and now it's becoming more of a mobile kind of company and kind of what we're seeing in in kind of the the peak from 2013 those quarters that were higher um so this quarter last year 2013 was higher and that was not really because mobile sales haven't really dropped off

what's happened is facebook sales were dropped off so if you look the underlying um facebook's mobile sales they did they have dropped um quarter one quarter and then picked up again but basically the decline that's kind of happened year on year has happened because the facebook business has collapsed not the business is in decline and it's not going to go up again whereas the mobile business has more mobile titles are released and king focuses more on mobile is going to go up so i guess that's a positive thing in the sense that this mobile business king small businesses is increasing and it's spending more time doing that um another kind of interesting thing which is kind of part of of the same kind of a structural scenario is if you look at the number of people so king like like these companies breaks out it's the what they call monthly active users and daily active users so there's a amount of people who are playing these games within that basis he also breaks out what it calls monthly unique users which is obviously uniques rather than people coming back many times it also breaks out monthly unique payers so what we've kind of seen over the past two years is that the number of payers it has in its system is is declining i'm kind of fairly rapidly

actually um but it also breaks out and this is a bit of a mouthful it breaks out what they call it's it's mon it's um it's it's monthly gross average uh basically revenue per unique per player and actually what's happening is that is increasing faster than the decline of unique players so and partly they've changed slightly some of the monetization mechanics so they're going for a more currency approach so that encourages people to spend more but encourage but less people are encouraged to spend but actually what we're seeing forking is it's actually some positive trends that it's actually monetizing its players at a higher level and it's actually monetizing more on mobile as more mobile players and it's actually um seeing more non-candy crush um uh game games making money so that's kind of interesting trend digging beneath just the fact that king makes a lot of money so um two other companies very different to king so two the two of the big korean companies announced their revenue um again 2014 revenue this year so there's a game bill and they come to us now it's kind of an interesting situation that come to us is the bigger company um so come to us is

um its shares were sorry sales were 216 million dollars in 2014. um game bill um its its sales were 131 million dollars but gameville actually owns a controlling stake in come to us it doesn't own the majority of shares but it owns a majority of kind of voting shares so he effectively has control so they're kind of joint companies even though they run separately so um but um what's kind of interesting about them is is what comes up is is the bigger company um at the moment it's most all pretty much the majority of its growth is happening outside of korea so 73 now of its revenue it happens internationally outside of korea um and the majority of that is happening in um apac region so particularly kind of china japan thailand taiwan and some other kind of countries in southeast asia so north america is not particularly big it's about 15 um and and europe about the same not too big for come to us and it's just kind of seeing this kind of massive growth outside outside of

korea and within this kind of um kind of china japan kind of area now gameville is almost exact topic so 61 of its revenue comes out of korea um international is not a particularly big deal for it's not particularly i mean everyone's looking at china it's not particularly gone into china and big way you know north america uh and europe again are kind of solid but not growing particularly fast and it's seeing even though the korean market is korean career as a small country um uh it's seeing the majority of its growth coming from that so you're seeing these two companies operating in the same kind of well kind of based in the same country but operating in a completely different way and both having massive success now what's interesting about that is that um like a lot of companies are saying it's a winner takes all scenarios so both these companies actually have kind of previously operated a portfolio kind of um impact so they've developed their own games they've also published games from other smaller developers they've kind of had a portfolio effect they've released you know maybe a dozen games a year maybe 20 games a year in some cases but we're kind of seeing that kind of scenario dying off now because what we see is a winner takes all scenarios so you're seeing the big a

big game it's easier to get more money out of a big game if you have a game doing 10 million dollars a year it's easy to get 11 million out of that game than it is to make a new game and get a million dollars out of that so we're kind of seeing a concentration of resources from all companies not just in korea um but on the big hits they're having now what's interesting is the big hits for um for both companies are actually broadly the same because they're korean based so they're kind of kind of this developers are keen on the same thing so rpg is clearly massive in asia and um so for come to us it's big game is someone else some of those wars um and that's had uh 30 million downloads now um and that's generating um the majority of its revenue but another big game is um ace fishing which is not kind of a genre you kind of think would be very big and then it's very similar with game bill so it has it broke out um it's it's top five games um we're generating 69 of all sales so it's just five games generating six nine percent of themselves and three of those were rpgs so there's a dragon blaze monsters warlord a few others um but then one of its other big games is fishing superstars so you kind of have these these two korean companies are

operating kind of making the same games making rpgs and fishing games and they're also quite keen on baseball games baseball being big in in certain parts of southeast asia um but they're just generating their money from completely different places and but both of them are just making massive amounts of of sales so to come to us is sales we're up 188 in the year and gainville sales were up 79 and both of them don't they expect next year to be kind of equally as as growth worthy so it's kind of interesting to see that these trends are happening um and uh hopefully next week we'll have some more financials to dig into see you next week