King is a “one-hit wonder,” its main brand is a “fad,” and similar companies the size of King have ended up being worth no more than “fifty bucks and a pile of debt,” according to the mag’s business writer, James Surowiecki. King is the “Beanie Babies” of tech, Surowiecki says.
The story notes that Candy Crush forms 80% of King’s revenue, and is already in decline. (See details on those numbers here.) Here are the worst quotes:
The I.P.O. is no surprise, given King’s domination of the booming mobile-game business, but it’s likely to end badly, because King is part of a venerable tradition: the one-hit wonder. Like Coleco, with Cabbage Patch Kids, or Ty, Inc., with Beanie Babies, King’s business is dependent on its one star product; although the company has more than a hundred titles, almost eighty per cent of its revenue comes from Candy Crush.
… failure is an ever-present threat. The company Harmonix, which launched Guitar Hero and Rock Band, games that in their day were as huge as Candy Crush, ended up being sold, after a few years, for fifty bucks and a pile of debt.
… Zynga has never come close to the success it enjoyed with FarmVille. Angry Birds is still by far Rovio’s most successful product. King has released a couple of successors to Candy Crush, but neither is a breakthrough.
… If King stayed private, it could milk its cash cow and build games without having to worry overmuch about hatching a new cultural juggernaut. We expect companies to constantly be in search of the next big thing. But, for one-hit wonders, the smartest strategy might be to just enjoy it while it lasts.
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