Two & a Half Gamers Session #18: King Revenue Analysis

This analysis evaluates the operational performance of King, a mobile gaming subsidiary of Activision Blizzard, focusing on user acquisition (UA), game design, and advertising monetization strategies. The primary thesis suggests that King possesses significant untapped potential to increase its total revenue by approximately 30% through modernized ad monetization practices and optimized user acquisition tactics.

In 2021, King demonstrated robust financial health, generating $2.5 billion in revenue, which accounted for 28% of Activision Blizzard’s total earnings. Notably, King was responsible for 50% of the parent company’s overall growth that year, marking a 19% year-over-year increase. Despite this success, the analysis identifies a critical inefficiency in King’s advertising strategy: the reliance on outdated inventory sales methods rather than modern mediation platforms. By transitioning to more sophisticated ad mediation, the company could capture substantial unrealized revenue.

The assessment also highlights King’s conservative approach to external user acquisition, noting that the company does not prioritize aggressive external UA channels. While the firm maintains a massive library of content—exemplified by the 11,000 levels within the Candy Crush franchise—the analysis suggests that integrating more dynamic live operations and refining creative strategies could further fuel growth. The findings are derived from a professional industry review of King’s historical performance, market positioning within the puzzle genre, and comparative analysis of its product lifecycle management, including the handling of titles like Crash Bandicoot and Knighthood. The scope of the analysis is global, reflecting the company's international market presence as of mid-2022.