Why are more mobile gaming companies moving towards IPOs?
The mobile games industry is exploding, especially as developers move to “freemium” business models. Some may think that mobile game developers would be wary of going public with their success after witnessing Zynga struggle to maintain users after its IPO (initial public offering).
However, several mobile game and app companies are making some steps towards going public, illustrating the insane capital success of the mobile games industry. Let’s take a look at a few:
First on the list is Supercell, a Finnish mobile gaming company, which is best known for “Clash of Clans” and “Hay Day”. Supercell recently sold 51% of itself to SoftBank andGungHo, makers of “Puzzles and Dragons”.
This partnership is foreshadowing for Supercell. The company aims to take its products global, and it is now able to do so with help from SoftBank and GungHo. This will be an interesting “test-drive” of sorts for Supercell to see if their apps are popular enough to keep users engaged before they try to file for an IPO.
Kabam, a San Francisco-based company most know for games like “Kingdoms of Camelot” is also hinting at a possible IPO sometime in the future.
Kabam has increased their forecast for 2013 revenue, and expects to be profitable this year with help from popular news games like “Dragons of Atlantis” as well as their third-party app distribution platform. Kabam has shown that their apps can maintain profitability with their “Kingdoms of Camelot” app which, at 4 years old, is still insanely popular with users.
Kabam’s CEO has declined to give an IPO timeline, but they will most likely wait until King’s (Candy Crush Saga) public debut so they can monitor how well the market responds.
Chinese mobile game company Chukong Technologies, Inc. has just raised $50 million to help socialize their games and solidify its mobile distribution platform. In addition to its own apps, Chukong localizes apps from companies like Disney and Gameloft. Chukong is rumored to be filing for an IPO sometime next year.
Sungy Mobile, a China-based app company, just recently filed with the SEC to be listed on the New York Stock Exchange. Sungy Mobile is responsible for the hugely popular Android “GO Launcher” as well as various GO series apps like task managers, clocks, and calendars. The GO launcher is one of only 10 apps on Google Play to have over 100 million installs.
King.com, the UK-based maker of hit “Candy Crush Saga” stirred the mobile app world into a frenzy when it was discovered that King confidentially filed for an IPO in the United States.
No one from King or from the banks they hired has commented on the details of the IPO. In addition to Candy Crush, King has over 150 games available in the mobile sphere. King has actually been around since 2003, and the company has been profitable since 2005.
A lot of mobile games companies are monitoring how well King does after going public, especially considering the difficulties Zynga has faced since going public. Unlike Zynga, King has a steady amount of daily active users (so far) and they have shown that they can continue to produce engaging games.
King’s IPO will be an interesting case study to monitor, especially for any mobile app developer looking to one day make their development company public.
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