Mobile game commercialization challenges of clutter, customer acquisition and working business models successfully overcome by King, Kabam and Supercell

1. Mobile Games?

2. The History -- Mobile Games
10 Years
2004
•Jamdat files IPO
2005 ** avg price $2.99 -$9.99
•Jamdat acquired by EA
2006
2007 ** iPhone launches,
avg price drops to $.99
•GLU Mobile files IPO
2009
2011
2008
2010
• Ngmoco acquired
by DeNA
• Hands on Mobile closes
2014
• King files IPO
March 2014
2012
** Avg price FREE
$2.4B sales / $681M profits
$46.2M sales / $12.4M losses
$28M sales / $3M profits
July 2014 – Alibaba
invests $120M in Kabam,
giving Kabam a valuation of
$1B
March 2014 – Rovio
cancels planned IPO
Jan 2014 – Kabam
announces $360M in sales
for 2013
$46.2M sales / $12.4M losses
2014 – COA $2.73, ARPU $ 1.96

3. Drowning in Apps

4. Freemium Dominates

5. Mobile Cost Per Install

6. Houston we have a problem . . .

7. Top Grossing Games by Platform
8/14/2014
iOS Top GrossingGoogle Play Top Grossing
AppAnnie

8. King Digital Entertainment and
Supercell Dominate Mobile
• King Digital:
– Tent pole property: “Candy Crush Saga”, Candy
Crush accounts for 78 % of King's sales & 86% of
mobile bookings.
– IPO March 2014
– Revenue $2.42B, Net Income $681M
• Supercell:
• Tent pole property: “Clash of Clans”
• Estimated 2013 sales of $800M

9. The King Secret Sauce
• Discovery solved . . . huge investments in
analytics and marketing drive purchase
behavior.
• Cost of acquisition . . . driven down through
cross selling portfolio across 100+ titles.

10. Key Take Aways
• OPPORTUNITIES & CHALLENGES: As King, Supercell, and
Kabam clearly demonstrate, there is tremendous opportunity
for those who solve the challenges of Discovery, the Business
Model & the Cost of Acquisition.
• PRODUCTION: In the Production Process, focus on the end
state, and build an achievable, realizable plan to achieve that
end state, taking into consideration the impact of both
external and internal development on your time lines.
• REVIEW SUCCESSES AND FAILURES: Beware of the “Survival
Bias”, look not just at those who have succeeded, but those
who have failed and understand why.
• CONTENT IS STILL KING: Focus on high quality content that
fills a niche currently not being served.

11. Links
• King F-1
http://www.sec.gov/Archives/edgar/data/1580732/00011931
2514056089/d564433df1.htm
• JAMDAT S-1
http://www.nasdaq.com/markets/ipos/filing.ashx?filingid=29
98464
• GLU S-1
http://www.nasdaq.com/markets/ipos/filing.ashx?filingid=47
84230
• AppAnnie https://www.appannie.com/intelligence/
• Kardashian Ranking http://www.distimo.com/iq/app/apple-
app-store/glu-games-inc/kim-kardashian-hollywood
• Developer Economics:
http://www.developereconomics.com/reports/q1-2014/

12. Mobile Games!