King.com's Facebook Foray Pays Off

 King.com, a 10-year-old online gaming company headquartered in the UK, waited until April 2011 to release its first Facebook game. Some predicted it was too late to get into that game but King.comhas surprised the industry: it is now the second-largest game company on Facebook, surpassing Electronic Arts and Wooga.

“Facebook has helped us get massive scale,” says Riccardo Zacconi, King.com’s chief executive and co-founder, and a scheduled speaker at Le Web, an annual Internet conference in Paris that attracts a global audience. “Before Facebook we had 300 million of our games played per month and now we have three billion per month.”

A number of European companies in areas such as music, gaming and fashion are thriving by putting their IP on Facebook’s platform. Along with King.com, Germany’s Wooga and Turkey’s Peak Games are ranked in the top 15 on AppData’s November 24th Facebook developer leader board.

Nordeus, a fast-growing gaming company based in Belgrade that makes a social game that enables people to run their own football clubs, play with their friends and compete against the world, credits Facebook with its success. Its game, Top Eleven, is the most-played online sports game in the world, with more than six million monthly and two million daily users on web, Android and iOS devices. And Supercell, a young Helsinki company, which uses Facebook Connect but does not build on Facebook itself, is generating more than $500,000 a day in revenues from two tablet games: Hay Day and Clash of Clans.

The spectacular growth of European companies like King.com and Supercell comes at a time when Zynga, the maker of Farmville and other popular Facebook games, has lost 75% of its value and is laying off employees and closing studios. Investors say Europeans are, in fact, proving more adept at monetizing the next generation of gaming than their U.S. rivals and that in turn is helping create a burgeoning batch of fast-growing European Internet companies.

King.com’s strategy is to roll out relatively basic games on its website and then invest resources to adapt the most successful ones for Facebook. The company then culls its games further, bringing to mobile only those that were most successful on the social network. King.comhas more than 150 games on its website and is introducing new ones at a clip of about 15 a year. Each new title requires relatively limited change in the code as they are produced using a platform so that common functionalities do not have to be reinvented for each game.

Seven have so far made it to Facebook and two of those to mobile including Candy Crush Saga, which in November made its debut on iOS and Android. (The game gained more than one million users during the third week of November according to AppData.)

King.comhad revenue of almost €45 million last year with gamers on Facebook generating about a third of the total, says Zacconi. The revenue figure has increased considerably this year as has the share coming through Facebook. The company generates its revenue through advertising, selling virtual goods used in games, and fees for participating in certain tournaments. It reported a pretax profit of €2 million last year.

Zacconi started the business with his own money and help from two angel investors before securing $43 million in funding from Apax Partners and Index Ventures in 2005, the year the company began turning a profit. King.com’s continued success and profitability have trumped any need to seek outside funding, says Zacconi.

“We have been able to launch one success after another on Facebook because we have been developing successful games since 2003,” Zacconi says. King.comhas proved adept at tapping into the 20-year-old to 45-year-old female demographic that makes up the bulk of casual gamers. King.comhas helped shift them towards social gaming and is now trying to get them playing on smart phones and tablets.

Candy Crush quickly rose to number one among downloaded games for the iPad in the U.S., UK, France and Germany after its November introduction. In its first week it was number five in the U.S. iPhone app store and top of the charts in France. While King.com experimented with two early games made for mobile, its true push in the arena came with Bubble Witch for iOS devices in July and Candy Crush in November. Both games are now also available on Android devices.

Facebook remains fundamental to the equation as it will be the link between the King.comwebsite and mobile. With half of Facebook’s one billion users accessing the social network on their mobile phones, it is becoming impossible to separate Facebook from mobile, says Zacconi. The Facebook version of the game will promote the mobile version with a link to the app store and the mobile version will link back to Facebook.

The idea is to create a seamless experience between devices. Players will be able to shift back and forth between computers, smartphones, and tablets – keeping their scores, levels achieved and any virtual goods they may have acquired.

King.com went from 110 employers before launching on Facebook to 330 now and expects to have 400 by year’s end. They have opened four new development offices in London, Barcelona, Malmo in southern Sweden, and Bucharest, and still work out of the original office in Stockholm.

“We want to access the widest talent pool so we go where the best developers are,” says Zacconi. “Europe has fantastic developers.” And as King.com and others have demonstrated, Europe is now churning out a growing number of fantastically successful gaming companies as well.