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King Beats the Street, Says There Is Life After Candy Crush

Mobile represents 77 percent of revenue, which is down 16 percent since last year.


Candy Crush Saga maker King beat Wall Street’s expectations in the most recent quarter, turning in bookings of $544 million and non-GAAP earnings per share of 56 cents, versus an expected $495 million and EPS of 47 cents. Its board has approved a program to repurchase $150 million in shares from investors.

A decline in players of King’s Facebook games was offset by growth in mobile users, the company said. Overall, monthly active users were up 37 percent, but bookings were down 16 percent year-over-year. Of that revenue, 77 percent came from mobile users.

Although Candy Crush still represents the majority of its revenue, King highlighted the fact that players are exploring its other offerings, with 49 percent of bookings coming from non-Candy Crush games, versus 15 percent in the same quarter a year ago. At the same time, it recently started rolling out a sequel to its most famous game called Candy Crush Soda Saga, which CEO Riccardo Zacconi called “key” to future growth.

Chief Financial Officer Hope Cochran said Soda Saga has already launched on Facebook, with the mobile version coming soon. However, she cautioned that the game is likely to split the Candy Crush audience in coming quarters, and likely won’t have much financial impact at first since the initial levels are designed to build engagement, rather than make money.

“It’s exactly the same audience” as the first Candy Crush game, Zacconi said in an interview with Re/code. He characterized Soda Saga as a “sister game,” offering new content and different ways to play to players who have either reached the end of the first game’s levels, or who are stuck between levels there and want to try something else.

In an Q&A with investors, Zacconi also noted that 2015 will see new casual game releases that do not rely on “puzzle mechanics,” as well as some non-casual games. He told Re/code that King will also change up some of its new casual games by experimenting beyond the “Saga mechanic,” where players progress from level to level.

The latter comment is especially interesting because the success of the “Saga mechanic” has driven many of King’s free-to-play competitors to copy it.

In the next quarter, King expects to gross between $525 million and $550 million. King shares were trading up five percent after hours.

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