Candy Crushed: Will New Games Help King Digital?

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Aug. 13 (Bloomberg) -- Bloomberg Intelligence’s Praveen Menon examines the state of Candy Crush Saga game maker King Digital as second-quarter sales trailed estimates, forcing the company to cut its 20124 outlook. He speaks on “Market Makers.”

Do we start with it is over four candy crush?

We have been expecting this decline.

It has been two years at the top.

Casual games actually don't monetize as well and it has been the big exception.

Can they develop games to offset such a megahit?

This is free to play and then you can pay extra for extra live and stuff like that.

Do they need to rethink the entire business model?

The thing with the premium model is when you look at 90% of the apps out there, they are rhenium.

If you look at what has made the most money, it has been the premium apps.

But they are really doing now is they are keeping the premium model.

Instead of letting people spend one dollar on life, they are making that hard currency.

They are dying -- buying gold bars within the portfolio so you can use for other games.

Why does it seem as though in the world of social gaming, so much of which is mobile that the stickiness, if you will, is so much harder to maintain.

Is it because of many of the players are kids and kids interest in anything is often very fleeting.

They are onto the next thing and what the next thing is is often anybody's guess.

When you look at the mobile gaming universe, your attention span for these games is much shorter than pc games.

When i am playing candy crush, very different from one i spent two hours playing half-life at home.

A game has to keep me interested.

The second thing is when you look at the cost of developing these games, it is much lower than like an nfl madden or half-life which takes hundreds of millions of dollars to develop and several years in the pipeline.

There is a lot more games out there.

The competition is much higher for these games then anything.

Is that to say that a company like king digital shouldn't have gone public?

That is one thing that investors will be looking at.

Only three companies have been successful with multiple hits in the top 10 and king has been only one of them.

Who are the other two?

Softbank and mobile.

Is it that hard to make popular items, will we see massive consolidation?

Zynga has the same issue.

What they started doing once their farm world started declining, they went out and bought the words with friends game.

They will spend hundreds of millions of dollars acquiring a studio.

So, i think the problem with these companies is to turn out hits one after another, it seems like candy crush is blaming the new kim kardashian game for distracting users.

I love candy crush, i would never play a kardashian game.

The problem is that they have talked about a greater competition.

Also, they talk that there was the step down in the usage of mobile games.

I don't know people are watching a lot more soccer.

I think that gaming is fickle.

A third of cap usage is games.

I talked myself back from the wall from candy crush because it is addicting.

I have to talk myself off of the ledge.

Is the comparison, you drew a comparison to movie studios.

The scope back what you're saying about barriers to entry.

That is more like for the big established console gamers like activision, for example, or take two.

There are predictable releases, they invest hundreds of millions of dollars and you can determine how successful or not they are.

It is much harder in the social games, you have no idea where the next it will come from.

They need to be a lot more tighter over the release schedule.

One of the reasons they cited for the u.s. users declining was this large gap between game releases.

For a company like king.com, it is important for them to manage that release schedule and keep these new games come expecting that they will not perform as well, still try to offset candy crush.

Another lesson to be learned.

This text has been automatically generated. It may not be 100% accurate.

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