There's been a lot of talk lately about a new "tech bubble" that we may or may not currently be in. This label applies to a lot of different things, from the booming smartphone and tablet market to health tech and smart home devices. But while I personally think the risk of a catastrophic tech crash is a bit overstated, there's one company that is most definitely riding high on borrowed time. That company is King, creators of Candy Crush Saga.
Candy Crush Saga first debuted on Facebook way back in early 2012 before eventually making its way to app stores later that year. As everyone knows, the game is a huge hit, drawing huge revenue from its in-app purchases and rabid fan base. The success of the game eventually became a problem for King, which delayed its IPO late last year over fears from investors that King was a one-hit wonder.
The thing about Candy Crush Saga is that it's not King's own invention, it's simply a tile matching game that draws heavily from games like Bejeweled, which had huge appeal as far back as 2001. This was in no doubt one of the things investors were worried about regarding King, and they still should be. Without doing much to prove it has a future making hit games, King eventually decided to file its IPO in March 2014 anyway, to the tune of over US$7 billion.
That's a whole lot of cash for a company that has yet to demonstrate it is capable of creating a game without using other established titles as their base. And I don't just mean being inspired by another game or genre -- these days a truly never-before-seen game is a rarity -- but literally lifting just about every game mechanic from a different game that has no links to King whatsoever.
Here are King's current App Store titles alongside the games that the company has lifted significantly from:
In roughly the past two years, King has "adapted" some of the most popular puzzle games of the past 20 years and republished them as its own. That is quite simply an unsustainable business model. How unsustainable? Well rather than branch out a bit, King also has two other newer games currently available on the App Store, Farm Heroes Saga (another match-3 puzzler) and Bubble Witch 2 Saga (an updated version of its Peggle clone).
And King's next big release? Candy Crush Soda Saga, which is exactly what you think it is.
There are definitely some parallels to be drawn between King and Zynga, the once-master of casual games which has since fallen on hard times once the appeal of its wares wore off. The company behind Farmville launched its IPO in 2011 with an initial share price of $10. After hitting a price in the low $2 range, the stock now trades at around $3 per share and is in danger of losing its listing entirely.
Like King, Zynga is a big fan of rehashing game concepts we've all played and enjoyed for years, but even with 17 current mobile games to its name, it still hasn't met even a fraction of the expectations that were set for it.
Rovio, another big name in casual mobile games, has held off on any IPO chatter while adapting its hit Angry Birds franchise into a variety of genres from racing to role-playing. But even with high profile crossovers with other popular IPs like Star Wars, the company's 2013 profit was less than half of what it was in 2012.
This is bad news for a $7 billion app company that has yet to prove it's capable of truly creating something gamers want from the ground up, rather than simply borrowing established ideas and giving them a new coat of paint. So if you're looking for a bubble pop, keep an eye on King, because it's riding on the biggest one in the land.