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Hopes for King's 'Candy Crush' share launch to erase memories of Zynga flop

Hopes for King's 'Candy Crush' share launch to erase memories of Zynga flop
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The smartphone gaming industry is anxiously awaiting this month’s initial public offering of shares by King Digital Entertainment, the maker of ‘Candy Crush Saga’.

London-based King just announced a share price ($21-$24) that would value the company at $7.6 billion (5.45 billion euros).

It is due to list on the New York Stock Exchange on March 26.

The mobile gaming industry is booming, but keen for King to succeed in order to wipe out memories of Zynga, the social gaming firm that lost half its value after launching on the stock market just over two years ago.

It became one of the consumer dotcom industry’s most oft-cited failures after being slow to revamp desktop-bound hits like FarmVille.

“The market is ready to move on from Zynga,” said Kevin Chou, the chief executive of San Francisco-based social and mobile game company Kabam. “There are no great public companies (in gaming) for investors to invest in the West that have the large majority of their revenues coming from mobile.”

Peak performance?

‘Candy Crush Saga’ had soared to the top of the app charts with 53 million daily users. The game was the most downloaded free app and top revenue-grossing app in 2013.

However, it accounted for nearly three-quarters of King’s 2013 revenue of $1.9 billion (1.36 billion euros).

Now some warn that ‘Candy Crush’ may have reached its peak, and its decline could seriously threaten King’s business. The company’s revenue for the quarter ended December 31 declined 3.0 percent from the preceding quarter, which it said was due to a fall in ‘Candy Crush’ gross bookings.

“We’re rooting for them,” said Dennis Fong, a retired pro-gamer who is known as “Thresh” and heads up gamer network Raptr.

“But Candy Crush is already on the decline if you look closely at the numbers and it’s similar to what Zynga looked like when it went public.”