BENGALURU: King Digital Entertainment plc (King) reported lower numbers for the quarter and also the year ended 31 December 2015 (Q4-2015, current quarter, FY-2015, current year). King’s revenue in Q4-2015 declined 15.6 percent YoY to $460.74 million as compared to $545.62 million in the corresponding prior year quarter. The company’s revenue for FY-2015 declined 11.5 per cent to $1,999.49 million from $2,260.24 million in FY-2014.
Net Profit for the current quarter declined 35.5 percent to $90.67 million (19.7 percent margin) as compared to $140.62 million (25.8 percent margin) in the corresponding prior year quarter. Net profit for FY-2015 declined 10.1 percent to $516.78 million (25.8 percent margin) from $574.85 million (25.4 per cent margin) in FY-2014.
King CEO Riccardo Zacconi said, “Our fourth quarter 2015 results reflect our continued execution on our franchise strategy. For the fourth consecutive quarter, both Candy Crush Saga and Candy Crush Soda Saga continued to rank within the top 5 grossing games in the Apple App Store and Google Play Store in the US. We are also pleased to have launched the third instalment of the Candy Crush franchise, Candy Crush Jelly Saga, which introduces new challenges and game modes, including our first ‘boss mode’, to offer our players another fun way to play one of the world’s most popular games.”
As is obvious from the figure below, the company’s Key Performance Metrics have all declined. However, Monthly gross average bookings per paying user (MGABPPU) have increased in the current quarter and year by 10 per cent and 19.7 per cent respectively.
Reported gross booking in the current quarter increased 1.3 per cent QoQ from $502.14 million in Q3-2015 to $508.77 million in Q4-2015, but declined 13.2 percent YoY from $586.28 million. Reported Gross Bookings in FY-2015 declined 10 percent to $2,144.86 million from $2,382.31 million in the previous year. The company says that excluding the impact of changes in foreign exchange rates, gross bookings would have decreased by approximately 3 percent during FY-2015 as compared to the previous year.
In 2015, 82 per cent, or $1.8 billion of gross bookings were derived from King’s mobile audience. This represented a 3 per cent annual decline in mobile gross bookings. Gross bookings from web platforms were $379 million, representing a 33 per cent annual decrease.
King says that the increase in gross bookings from Q3-2015 to Q4-2015 was primarily driven by growth in Candy Crush Saga and its newer games. The sequential decrease in revenue reflects the growth in gross bookings which was more than offset by an increase in deferred revenue for virtual item balances held by players.
The year over year decreases in both gross bookings and revenue were primarily due to lower gross bookings from Kings more mature games, in particular Candy Crush Saga, partially offset by increased gross bookings from its newer games, in particular Candy Crush Soda Saga. Additionally, no new franchise games were launched in 2015, as compared to three franchise games launched in the prior year. The company says that the decrease in revenue also reflects a higher sales tax related to the value added tax legislation in the European Union effective in 2015, and sales tax provision reductions in other jurisdictions in 2014.
