Candy Crush Saga brought in more than $1 billion in revenue last year

Candy Crush Saga is a free download from the major app stores. That is free as in no cost to the buyer. Yet, the mobile game brought in the amazing sum of $1.33 billion last year for its developer, King. All of that comes from in-app purchases. While that number seems high, consider that these in-app purchases have actually been declining. For the last 6 months of 2013 alone, the game had revenue of $1.04 billion. The game took in peak revenues of $551 million in the third quarter of 2013.

Since peaking, the game has continuously brought in less money each quarter. The fourth quarter of 2013 saw it take in $493 million. For the four quarters last year, revenues amounted to $429.5 million, $360.5 million, $277.4 million and $263.8 million respectively. If you want to know what happens when a popular mobile game goes south, ask Zynga who overpaid for Draw Something creator OMGPOP to the tune of $180 million back in 2012. When that game started to lose players, the company ran into major financial problems.

While Candy Crush Saga might be the poster boy for the freemium pricing model, it is on a downward slope and those lost revenues will need to be replaced somehow. The problem is that 97.7% of those playing a King game are playing for free. It is the remaining 2.3% that supports the whole operation. On the other hand, this could be quite an opportunity for King if they could get more of those 97.7% to loosen their wallets.

source: TheGuardian