Free Pricing Strategy: King

Game developer King is a well known company that focuses on providing interactive entertainment for its users, which average about 92 million a day. They aim to make their games accessible at any time, anywhere and on any device, and strive to differentiate themselves from competitors: “our focus is to provide a highly engaging, differentiated entertainment experience where the combination of challenge and progress drives a sense of achievement.” (About, 2014). Additional information on the company is illustrated in their info-graphic timeline, which chronicles the high points of the company history, including the introduction of games such as Papa Pear Saga and Farm Heroes.

On April 12, 2012, King released a simple yet addicting game that has taken up residence on numerous Facebook accounts, mobile phone platforms and internet browsers. In March of 2013, it claimed the top spot for being the most popular game on Facebook, attracting 46 million users on average per month. For this case study, I am going to focus on the pricing strategies used for Candy Crush Saga.

Candy Crush Saga

Candy Crush Saga

Candy Crush Saga is a puzzle video game, where the player must swap certain pieces of “candy” on the game board in order to create rows of three of the same type of candy, including jelly beans, lozenges, chiclets, lollipops and lemon drops.

"Candy Pieces"

“Candy Pieces”

In order to swap one candy with another, they must be adjacent to one another, again with the goal of creating a set of three. Certain combinations of candy can create special effects, such as the color bomb seen above, created when 5 of the same candy are aligned, or the striped candy which eliminates the entire row it is in, allowing more candy to fall from the top of the board. In addition to the special candy combinations, the levels become increasingly more difficult as obstacles are introduced, such as obtaining a certain score within a set amount of time, or breaking through “jelly” which requires the candy to be aligned in a set of three twice in order to be taken off the board. As the player defeats each level, they move through a series of episodes, each with a new environment, set of characters and obstacles, such as Lemonade Lake or Minty Meadow. Users have 5 lives to try and pass a level, and if they fail then they must wait a certain amount of time before being able to try a level again.

candy_crush_game

This video helps to illustrate the different moves a player can make, as well as the set-up of the game.

Users can download Candy Crush Saga for free to use on their iPhone, iPad, iPod touch, android devices, Facebook accounts or Google play. As of November of 2013, Candy Crush Saga has been installed on Facebook, iOS and Android devices 500 million times, with 1/23rd of all Facebook users playing along (Hodapp, 2013). This is especially encouraged by the social aspect of the game, where players can ask their Facebook friends to give them an extra life, or a booster to help them in the game, thus increasing the spread of the game. Users have even created a wiki page that outlines the different levels, provides cheats and allows a forum for collaboration among users.

To move into the pricing strategies utilized by Candy Crush Saga, King uses the zero marginal cost approach as well as the freemium and cross subsidy strategies. Candy Crush Saga is a great example of a zero marginal cost product, for it is a completely digital product that can be distributed at no cost to King and the consumer, and is available to an extremely large audience.

Avg. Revenue Per Customer

Avg. Revenue Per User

To be more specific about the economics of this pricing strategy, Candy Crush Saga can be seen as a non-rival good, where one person playing the game would not prevent another to simultaneously play the game as well. This is usually the case with most intangible goods, and can also be seen with music downloads, or television shows, again, without presenting an additional cost to the manufacturer (Microeconomics, 2014). In addition to being a non-rival good, Candy Crush Saga is most often always a public good, meaning consumers are not excluded from gaining access to, or from having their usage restricted in any way. The only instance where users may be excluded would be if they do not have a platform to play the game on.

Rival vs. Non Rival Goods

Rival vs. Non Rival Goods

However, King generates the most revenue using the freemium, and then cross subsidy approach. Downloading Candy Crush Saga is free for users on all platforms, which gives the player access to the basic game play and features, however there are prompts throughout the game that entice the player to purchase low-price items that provide them with an advantage in the game. For instance, if a player is stuck on a certain level, they can opt to pay $0.99 to automatically advance to the next level.

In App Purchases

In App Purchases

This pay-as-you-play approach takes advantage of the idea that the players are so consumed by their drive to get to the next level, that they don’t mind spending a dollar here or there.

Upgrade Prices

Upgrade Prices

Candy Crush Saga even misleads the player at times, for example when one fails to pass a level, they are given a screen with two options, they can either choose to keep playing, or end the game. The “play on” button then flashes green attracting the attention of the player, but what many forget is that this brings them to the Candy Crush store, where they must purchase another life, or access to the next level to continue the game. Many will subconsciously, or accidentally choose this button, because of the wording and the attention it attracts.

End of Level Prompt Screen

End of Level Prompt Screen

Although it is possible to complete all the levels without paying for anything, the ability to purchase boosts throughout the game allows the player to speed up the process.

Website ThinkGaming analyzes the metrics of popular apps and mobile games, and estimates that Candy Crush Saga brings in over $750,000 daily, among close to 8,000,000 users per day (Candy Crush Saga, 2014). Candy Crush Saga has also done its fair share in topping numerous ranking charts, becoming the #1 grossing game on Facebook, and one of the top five grossing games worldwide this past year.

Rankings

Rankings

In addition, revenue has been estimated to have quadrupled to about $500 million this year. King is planning on expanding their work force as well from 400 to around 700 (Rushton, 2013) and currently holds offices all around the world including San Francisco, Stockholm and Barcelona.

Thus, the simple nature of the game easily draws in players of all levels, and the pricing strategies have worked extremely well thus far. It is rare to see advertisements for Candy Crush Saga on television or print, for there is so much popularity surrounding the social aspect of the game, as well as a substantial revenue from the in-app purchases that it would be unnecessary to dedicate funding to this. Even on the iTunes store, Candy Crush Saga has received positive reviews, and a four star average rating.

Ratings

Ratings

The choice players have to play through for free, or to expedite the game with in-app purchases is definitely a key factor in the success of the game, and can appeal to a variety of users. And even though the purchases seem minimal in price, the sheer quantity of people playing and purchasing certainly makes up for it.

Sweet!

Sweet!

 

References:

“About.” King. King, 2014. Web. 10 Feb. 2014.

“Candy Crush Saga.” Think Gaming. Think Gaming, 2014. Web. 11 Feb. 2014.

Hodapp, Eli. “Candy Crush Downloads.” Touch Arcade. N.p., 15 Nov. 2013. Web. 10 Feb. 2014.

“Microeconomics- Public Goods.” Pitt.edu. Pitt.edu, n.d. Web. 11 Feb. 2014.

Rushton, Katherine. “King Looking for Growth.” The Telegraph. Telegraph Media Group, 19 Sept. 2013. Web. 11 Feb. 2014.

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