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How King.com, the second largest games developer on Facebook, plans to capitalise on Facebook’s IPO

By Joe Fernandes

May 25, 2012 | 6 min read

The Drum’s Joe Fernandes speaks to Alex Dale, CMO of King.com, about becoming the second biggest game developer on Facebook and how the company hopes to benefit from the $104bn IPO.

As Facebook begins trading on the New York Stock Exchange in the third largest US IPO, brands like King.com are hoping to capitalise on the new opportunities that should arise.In a letter accompanying the Securities and Exchange Commission S-1 filing, Facebook’s Mark Zuckerberg said the social network is hoping to improve how people connect to businesses and the economy. “A more open and connected world will help create a stronger economy with more authentic businesses that build better products and services,” he explained. For King.com, Facebook’s strategic growth areas offer plenty opportunities. The company only began fully utilising the social gaming opportunities on Facebook eight months ago, but has climbed from the 45th largest games company on the site to the second biggest game developer after Zynga, and is the sixth biggest Facebook developer overall.The achievement is no mean feat and opens the door for the company to explore new options. Though the company is highly unlikely to topple Zynga to the top spot – Zynga CEO and founder Marc Pincus was an early investor in Facebook, putting in a reported $40,000 in 2005 and his company contributed 19 per cent of the site’s revenues in 2011, amounting to $159m – King.com still sees big opportunities from Facebook’s IPO ambitions.The Drum met with King.com CMO Alex Dale to find out what benefits he expects to reap from the $104bn deal.“It’s remarkable how Facebook has continued to grow. For us, it has really helped to boost our user base and expose us to new audiences we wouldn’t have connected with before. The IPO focus on user experience will mean developers like us will be able to enhance our offerings in bigger and bolder ways, making the most out of Facebook Credits and enhancing social engagement opportunities.”King.com’s growth via Facebook has seen it become a leader in casual social games, with over 38 million unique players and nearly 2.8 billion games played each month globally. Each of its games carries the “Saga” suffix as they offer many games experiences through which the player can progress – “a seemingly never-ending puzzle”, Dale enthuses. The games work by constantly adding levels, modes and boosters to keep players excited and engaged under a “freemium” model. The extra support can be bought via Facebook Credits or viewers can view a branded video advertisement instead and earn the booster for free.At the time of writing, King.com was the sixth largest Facebook developer partner, attracting over 12 million daily and 47 million monthly active users according to AppData. Its biggest game, Bubble Witch Saga, attracting 6.4 million daily users and recently released Candy Crunch Saga, with 2.3 million daily users, is Facebook’s fastest growing game for May 2012. Dale says success has seen has been driven by a new social audience. Nearly three quarters of King.com members are women; 54 per cent are 35 or older. “The puzzle elements of our games have opened us up to a whole new audience using social media. Around 70 per cent of our audience using Facebook is mothers who enjoy the unique formats the Saga series entails and are keen to offer us constant feedback over how we can be better. It’s a completely different audience to the users of our own homep age who are more competitive and play for cash and has really helped us broaden our horizons,” he says.Facebook identified mobile as a concern in its initial public offer filings, saying that it would have to adjust its plans for generating revenue as users shifted from the desktop version to the mobile web and apps. Dale welcomed this move and said King.com is planning to do the same thing, recently acquiring mobile games development studio Fabrication Games, and opened a mobile development studio. “As Facebook begins to focus more on mobile, so too will we, by trying to encourage people to play more using devices. In general, the advertising mechanisms for the mobile media still need to be defined. It’s not as easy as it is on a PC to get people to engage with adverts. The key is to offer the same quality you get on a PC on any mobile browser. We will use Facebook Connect to ensure users can synchronise their games wherever they are,” he said. However, he questioned the recent decision by US car giant General Motors to pull all paid for advertising from the network. The firm said the ads were not effective, but Dale commented: “We know from our own research that Facebook is extremely effective. I think that GM’s decision to scrap paid for, but keep free communications is puzzling. Advertisers need to be clear about what they consider to be results and work with their agencies to determine that efficiently.”Dispelling an AP-CNBC poll which found that 57 per cent of Facebook users claim never to click on ads and only 4 per cent say they do, Wayne Emanuel, an account manager for King.com, added: “Media buyers look to us to bring life to brands in context with our games. So the 30-second spots we choose relate to the demographics playing the game. We feature ads that earn high engagement by speaking directly to the key decision maker in households and track everything to prove to the brand that it is worth it. Where ordinary ads may well be ignored, these types of ads do very well.”The approach appears to be working. King.com has a continuously growing library of 150+ games in 14 languages, and offices in London, San Francisco, Malta, Hamburg and Milan.Dale says its investment in Facebook has helped it reach double digit revenue growth and double its employee numbers in the past year. Outside of Facebook, it has extensive partnerships with the world’s largest portals and media properties, including Yahoo!, RTL and Sat1. The company does not publish revenues but pays payment processing fees related to the sale of virtual goods in its games to Facebook. It is unknown how much this equates to, but as guidance, Facebook receives 30 per cent of the face value of user purchases in Zynga’s games.King.com admits it is looking at alternative advertising options to continue offering its “freemium” model and maintain growth. Recent trials include offering product placement to Wendy’s in one of its games, taking over the virtual store and offering branded virtual merchandise. Dale said downloads were high for the pilot.Indeed, the global social gaming market’s value is forecast to grow by 166 per cent to almost $4 billion by 2015. Facebook’s IPO could prove crucial to achieving this for firms like King.com.
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