King vs. Kabam on the Road to IPO

As of May 2013, King and Kabam emerged as the primary candidates for a post-Zynga initial public offering within the Western gaming sector. Both companies successfully transitioned from web-based platforms, specifically Facebook, to mobile-first revenue models. By 2013, both developers projected that approximately half of their total revenue would be derived from mobile platforms, marking a significant shift from their 2011 reliance on web-based traffic.

The two companies employ distinct operational strategies. King leverages a vast portfolio of titles, utilizing a soft-launch strategy on the web to identify high-performing mechanics before scaling them to mobile. This approach has yielded significant success, with Candy Crush Saga achieving top-tier rankings in both downloads and gross revenue. Conversely, Kabam focuses on core gaming experiences and high-efficiency performance marketing, which results in higher lifetime value and average revenue per daily active user metrics. Kabam has further diversified its business model by launching a third-party publishing unit and a fund dedicated to assisting Asian developers in entering Western markets.

Financial indicators suggest King maintains a lead in scale, with a projected 2013 revenue run rate of $524 million compared to Kabam’s projected $200 million. While both firms are well-positioned for an IPO, King has demonstrated more aggressive public intent. However, Kabam’s strategic investments in Asian markets and its established publishing infrastructure may provide a competitive advantage in demonstrating long-term growth potential to public markets. Ultimately, both companies represent a shift toward more sustainable, diversified mobile gaming business models following the cooling of investor sentiment toward previous industry IPOs.