Sony Celebrates PS4’s Huge Launch Success

It has been confirmed that the PS4 was not only the biggest launch in the history of PlayStation, but also the largest launch for a console in the history of the industry. Sony is smartly crediting the fans for this success, and this video gives the fans a moment in the spotlight while highlighting the features fans like about the console so much.


Kmart Will Ship Your Trousers

The “Ship my Pants” ad that Kmart did was one of the more attention getting ads from the retail chain in recent memory. For the holidays, they’re doing one themed after A Christmas Carol, called “Ship My Trousers.”

{video link marked “private”}

What Went Wrong With The King IPO

Swedish game publisher and developer King was poised to become the biggest video game IPO since Zynga. Although the company never publicly confirmed it was going public, King had begun the process behind-the-scenes with a confidential SEC filing. But the IPO has reportedly been put on hold – for now. What went wrong

“Most probably, King’s bankers have been sounding out interest amongst institutional investors for King stock in the last month or so,” said Thijs Hagoort, co-founder and CFO of video game research firm Newzoo. “I expect that the feedback investors gave did not match the value expectations of the company, rumored to be $5 billion. As large amounts of cash keep flowing into the company thanks to a profit margin above 50 percent, shareholders will be reluctant to settle for a lower valuation of the company, and they clearly don’t need to IPO to fund growth.”

According to Wanda Meloni, president of video game research firm M2 Research, what King seems to be saying is that they are delaying the IPO, not that they are cancelling it altogether. They brought in their new CFO, Hope Corcoran back in September. Corcoran previously helped Clearwire raise over $11 billion in funding.

“It might have been more about timing than anything else,” said Meloni. “It is hard to say when they might try again. It depends on market conditions. From an industry perspective, we really need to have the next IPO hit it out of the park. So there is a lot of pressure to do it right. Additionally, the financial markets seem to be a little tenuous at the moment, so they may also be waiting for investment confidence to increase.”

A King spokesperson said, “while there continues to be lots of speculation about what our plans may or may not be, we’ve not commented and won’t be commenting on that speculation.”

King’s flagship game Candy Crush is now bringing in over $1 million dollar a day (even after paying Apple and Google 30 percent). The game’s recent launch on Kakao opens up yet another revenue platform for the puzzle game. Hagoort forecasts that King will generate revenues of around $500 million this year and could well be heading towards $1 billion dollar revenues in the future. The rumored $5 billion IPO value would mean about 10 times 2013 revenues.

“Valuing such a company is very hard: exceptional growth and strong profits margins on the one hand, and a short track record and the perceived risk of being a one-hit wonder on the other,” said Peter Warman, president of Newzoo. “Evidently, Zynga’s performance has not helped in this respect and we believe that the number 1 question institutional investors will be asking is ‘How can I be sure this is not another Zynga ’”

Meloni believes King, which has been around for 10 years, is not another Zynga. She added that for the video game industry at large, Zynga’s problems have had a serious ripple effect for other companies.

“Zynga’s issues have been more about their bloated expansion strategies through acquisition, which generally doesn’t provide long-term growth stability,” said Meloni. “When it came time to cut costs, Zynga had to cut redundancies through headcount and studio closures. Ultimately, it left people feeling very skittish about games and entertainment content as a viable investment strategy.”

Hagoort also said there could be completely different explanations for what went on behind closed doors.

“King mayhave found a new large pre-IPO investor, limiting the appeal of an IPO this year, similar to what happened with Facebook in 2009 when Digital Sky Technologies bought a stake,” said Hagoort. “Or perhaps management has become less enthusiastic about a U.S. public listing once they fully became aware about all the hassles it brings in terms of regulatory compliance.”

King has risen to the top of the competitive global casual games market using a simple formula. The company uses its website,, as an incubator where over 150 free game demos are played by consumers around the world. Top games are chosen based on analytics and data and fine-tuned for full-on Facebook gameplay. From there, successful games expand to mobile devices, offering a connected experience that allows players to log in and continue a game across PCs, tablets and smartphones.

“We have a good audience of King fans on our website and as we launch games onto it, we are able to quickly gauge which games are proving most popular,” said Tommy Palm, Games Guru at King. “From there we can evaluate how the added social elements of developing the game for Facebook and for mobile platforms will enhance our players’ experience with the game.”

The formula works. King gets over 1 billion gameplays daily, which is up from 9 billion gameplays per month back in February. It’s most popular game, Candy Crush Saga, has been downloaded over 500 million times since April 2012. Over 150 billion Candy Crush Saga games have been played across Facebook and mobile devices, as consumers ride a virtual sugar high matching three or more candies in progressively more challenging levels. According to AppData, Candy Crush Saga has over 100 million monthly active players, and King reports that one in every 23 Facebook users worldwide is a fan of Candy Crush Saga. The game has even spawned merchandising through four flavors of Candy Crush Candies, which are now sold around the world.

“Candy Crush currently holds the number one grossing position in about two thirds of every country on the planet, iOS and Google Play alike,” said Warman. “On iOS and GooglePlay the game has grossed around $300 million to date. Currently, players worldwide spend about $1.3 million per day playing the never-ending puzzle. The game continues to engage people on Facebook and guides them to the mobile version. To put this success in perspective: Kings’ Candy Crush grosses more money in the U.S. alone than all of Zynga’s mobile titles put together on a global scale.”

It’s these types of numbers, coupled with the strong performances of other titles like Bubble Witch Saga and Pet Rescue Saga (each of which attracts over 10 million monthly plays on Facebook according to AppData); that recently steered the private company toward an IPO.

“What I like about King is that they have been around for 10 years, they are not a start-up,” said Meloni. “They have systematically shifted with the industry. They have also hired Hope Cochran as their new CFO, which for me is an extremely impressive move.

Investors who are hesitant to pull the trigger on another casual games company after the Zynga IPO debacle shouldn’t expect a repeat with King. According to Jesse Divnich, vice president of Insights with EEDAR, where King has succeeded and where Zynga initially failed is the reliance on letting data drive game design.

“Zynga had an over reliance on data, which has arguably been remedied over the years,” said Divnich. “But they let it drive game design far too much. This ultimately hindered innovation.

With King, they still make a great deal of revenue from games that are derivatives of others in the market, but I get the sense that they quickly identify when they have a big market potential on their hand or when they have truly created something innovative the masses will love. King knows when to pull the marketing trigger. The quantity of games they release may seem like they lack a methodical process, but they certainly take a methodical and caring approach before they put their marketing muscle behind a title.”

Ricardo Zacconi, CEO and co-founder of King, said there has been a major shift in how users not only play games, but actually consumes digital content. According to Newzoo, smartphone and tablet gaming will account for 27.8 percent of all gaming revenue by 2016, bringing in over $23.8 billion. That’s a compound annual growth rate (CAGR) of 19 percent for smartphones and 48 percent for tablets. Investment bank Digi-Capital forecasts that global mobile app revenues will reach $70 billion by 2016 (up from $15 billion in 2012) with games currently accounting for 70 percent of worldwide app revenues (up from 40 percent  in 2010).

“Key variables that will define what (app) content will be consumed is how much time you have and what kind of device and screen size you have,” said Zacconi. “Our games are perfectly suited for bite-sized entertainment, since you can play one level of Candy Crush Saga or Bubble Witch Saga in three minutes with one hand.”

Meloni said King has continued to succeed in the overcrowded casual Facebook and mobile game markets because they remain in tune with its customers, maintaining a very loyal fan base for its games with little churn, unlike Zynga. King has shelved games that they didn’t think would do well. Back in June King abandoned in-game advertising because so much of its revenue was coming from micro-transactions and the ads were taking away from the player experience.

King has also successfully targeted both male and female gamers. Female gamers make up half of all gamers today. And the publisher continues to release new games like Papa Pear Saga and Pepper Panic Saga, while expanding their established games. Warman said the success of Pet Rescue Saga, which launched this year and is making over $400,000 a day, proves that Candy Crush Saga is not a one-hit wonder. Now it’s up for investors to feel the same way.



NPD: November Retail Sales Up 7%

The numbers are in for November retail sales in the U.S., and as you would expect hardware sales were great with the launch of two expensive new consoles in the month. “With the introduction of the PlayStation 4 and Xbox One, coupled with positive sales for the Nintendo 3DS, sales in November 2013 marked the best November for hardware sales on record,” said NPD’s Liam Callahan. “Hardware sales rose by 58 percent over November 2012, driven by an over 80 percent growth in sales of console hardware.” Hardware sales were $1.327 billion for November, compared to $839.1 million last year.

The PlayStation 4 led the sales picture, shipping one week before the Xbox One in the U.S. “PlayStation 4 led U.S. hardware sales for the month, and marked the highest first month sales of a hardware platform on record,” said Callahan. “When looking at sales on an average per-week basis, Xbox One led PS4. Keep in mind, however, that supply typically becomes constrained in the second week after launch. Xbox One was the second highest selling platform for the month, which marked the largest launch for a Microsoft console.”

In other words, it’s really too early to tell who’s leading in next-gen sales, as the territories, release dates and available inventory are all different. These differences will diminish over time, and a truer picture of the relative sales between the two consoles should start to emerge in the first or second quarter of 2014. Importantly, though, software sales for next-gen looked strong. “Attach rates of software to hardware were strong for the new console introductions, with PS4 attach rates exceeding those of the launch months of both the PS3 and the PS2,” Callahan noted.

Meanwhile, Nintendo’s 3DS did well. “Supported by strong content throughout the year, including this month’s The Legend of Zelda: A Link Between Worlds, Nintendo 3DS hardware unit sales have increased by 15 percent year-to-date through November,” said Callahan. Tellingly, though, no mention was made of the Wii U.

The picture in software was much grimmer compared to the stellar sales in November of last year, with software this year 24 percent below the level of November 2012. “November 2013 proved to be a difficult month to compare to November 2012, which included the launch of games like Halo 4,” said Callahan. “November 2013 also included second month sales of key games like Battlefield 4 and Assassin’s Creed 4, which followed a typical drop off found after the first month. Collective sales from software introduced in November 2013 compared to software launched in November 2012 were down 41 percent, and were a major contributor to the overall software decline this month.” Software was only $1.085 billion, down from $1.435 billion last year.

The big winner in software was, of course, Take-Two. “Driven by continued success of Grand Theft Auto V as well as strong sales of NBA 2K14, year-to-date through November 2013, Take 2 Interactive led software sales as the top publisher,” said Callahan.

November 2013 Top 10 Games
1. Call Of Duty: Ghosts (360, PS3, PS4, XBO, PC, NWU)** Activision Blizzard
2. Battlefield 4 (360, PS3, PS4, XBO, PC) Electronic Arts
3. Assassin’s Creed IV: Black Flag (360, PS4, PS3, XBO, PC, NWU)** Ubisoft
4. Madden NFL 25 (360, PS3, PS4, XBO) Electronic Arts
5. Grand Theft Auto V (360, PS3)** Take 2 Interactive
6. NBA 2K14 (360, PS4, PS3, XBO, PC)** Take 2 Interactive
7. Skylanders SWAP Force (WII, 360, PS3, NWU, 3DS, XBO, PS4)** Activision Blizzard
8. Just Dance 2014 (WII, 360, NWU, XBO, PS3, PS4)** Ubisoft
9. Disney Infinity (WII, 360, PS3, NWU, 3DS) Disney Interactive Studios
10. FIFA 14 (360, PS3, PS4, XBO, PSV) Electronic Arts

**(includes CE, GOTY editions, bundles, etc. but not those bundled with hardware)

Brazil Transforms For The World Cup

Soon all eyes will be turning to Brazil for the World Cup in 2014. This ad reflects how the South American country will become a stage for one of the biggest events in sports, showing Brazil turning into a stadium unto itself.

{video link no longer available}

Old Spice Guy Searches For Manliness In The U.K.

Old Spice is looking to the “Old World” to find the manliest man of all…. The Gentle-Man. Let’s wish him good luck on his sojourn.

{video link no longer active}

Club Penguin Game Introduces Subscription Plan

Has a company found a way to launch a subscription-based plan for a mobile game on Apple’s App Store It certainly looks that way.

Disney’s MMO-based Club Penguin  has made its way to mobile, and Apple has given the okay to use recurring subscription payments, instead of paid downloads or in-app purchases.

When asked about the process, Club Penguin’s Chris Heatherly explained the approach for the app. “It’s not a game. It’s a kids’ social network in the guise of a game.”

The subscription plan currently sits at $7.95 per month, although discounted plans are available in three to six month set-ups if customers prefer.

Source: All Things D

Microsoft’s Xbox One Exclusive Price Increase

Usually, after a game comes out for a console, the price decreases to attract more buyers. That’s not the case with Microsoft’s Xbox One exclusives, however, as the company has given a few select titles a price hike.

Dead Rising 3, Ryse: Son of Rome and Forza Motorsport 5 initially launched at 44.99 in pounds apiece. This week, though, they’ve gone up to 49.99.

Although Microsoft didn’t explain the decision behind the hike, it stated that possible deals and promotions could be in the works for them. “Yes, pricing for select digital content in some markets have changed since launch,” a spokesperson explained to Eurogamer. “Digital content pricing is subject to change and we may occasionally offer various deals or promotions. Ultimately, pricing and promotions will vary by region.”

Fortunately, it doesn’t look like U.S. pricing will follow suit, as the games already sell for $59.99 apiece.

Source: Eurogamer