Last week, King, the developer behind Candy Crush Saga, announced that it would remove all in-app advertising from its games, across all platforms. The change represents a strategic about-face from its position in November 2012, when Candy Crush Saga launched on mobile. At that time, Alex Dale, King’s Chief Marketing Officer, told Inside Social Apps:
“Game advertising, when it’s aligned with the gamer’s interests, is very very effective because players are in the funnel…They’re not ‘media meshing’ (playing web and tv at the same time). We get phenomenally high click rates because of this.”
In November 2012, Dale claimed that in-app advertising accounted for 15% of King’s overall revenue. That number is likely appreciably lower now, owing to the breakaway success of Candy Crush Saga on mobile; according to Distimo, Candy Crush Saga was the most downloaded app on the iOS App Store and the 5th most downloaded app on Google Play in May 2013.
In mid-May, King’s CEO, Riccardo Zacconi, released some data points about the company that emphasized just how successful its transition from the web to mobile has been:
- Total DAU, all titles, all platforms: 70 million
- Monthly gameplay sessions, all titles, all platforms: 21 billion
- Daily gameplay sessions, Candy Crush Saga, mobile: 500 million
These data points, when taken together in the context of King’s decision to abandon in-app advertising, can be used to construct a picture of how much money Candy Crush Saga is generating on mobile.
Using data from MoPub’s recent Q1 2013 Mobile Advertising Marketplace Report, a three-month average mobile CPM of $0.75 is calculated, broken down as below:
Some further assumptions must be established before a very rough* estimate of Candy Crush Saga’s total daily revenue on mobile can be calculated:
- DAU distribution and monetization across platforms is proportional to ad spend share. This is verifiably false, but as King doesn’t release this data, it will be assumed for the purposes of making a revenue estimate.
- King receives the average CPM established above.
- On average, one ad is shown per gameplay session.
Taking these assumptions into account, a revenue schedule, given different proportions of in-app advertising revenue relative to total revenue, reveals that Candy Crush Saga earns between $2.5 and $6.3 million per day, with a median value of $3.6 million per day.
Where exactly ad revenue stood as a proportion of total revenue in Candy Crush Saga before King’s decision is unknowable (and irrelevant, as it now stands at 0%). What can be surmised from the shift in strategy is that, whatever the percentage of total revenues advertising represented, King feels the attendant decrease in in-app purchases that advertising wrought upon Candy Crush Saga was larger; by removing ads, King believes it will increase total revenues through some combination of increased engagement and increased monetization.
* The assumptions used in this calculation are obviously not valid, the calculation cannot possibly be exact, this is considered nothing more than an intellectual exercise, all such models are inherently inaccurate, and stating any of the above in the comments to this post is unnecessary.