'Candy Crush Saga' maker King ditches in-app advertising business


King, the company behind the wildly popular mobile game Candy Crush Saga, announced it will discontinue its mobile advertising efforts, instead focusing solely on revenue from in-app purchases.

As TechCrunch reports, King announced its decision in an email to its advertising partners earlier this week: "King's #1 focus around delivering an uninterrupted entertainment experience for our network of loyal players across web, tablet and mobile has unfortunately led to the difficult decision of removing advertising as a core element of King's overall strategy," the company wrote, according to TechCrunch. "The executive team has decided to withdraw completely from the advertising business thus, removing all advertising elements within every King game worldwide effective immediately."

The action is particularly noteworthy considering Candy Crush Saga was the top free application in Apple's  (NASDAQ:AAPL) App Store in May, according to Distimo, and the No. 2 revenue-generating application in the App Store during the period. King in May announced it is now seeing 70 million daily players across all platforms including mobile, bypassing mobile gaming giant Zynga's (NASDAQ:ZNGA) 52 million daily active users.

It's no real surprise that in-app purchasing continues to drive a significant amount of revenues for mobile app companies. Indeed, Distimo reported in March that fully 76 percent of all Apple App Store revenues could be attributed to in-app purchases, up from 53 percent in January. But King's announcement indicates that trend is accelerating.

Indeed, in related statistics, mobile gaming company Glu Mobile (NASDAQ:GLUU) announced that in the first quarter in-app purchases accounted for 73 percent of its total revenues. Non-incented ads accounted for 9 percent of the company's first quarter revenues and offers and incented ads accounted for 7 percent of revenues (with the remaining revenues falling under the "premium" category).

King's withdrawal from the mobile advertising space could potentially have implications for companies that sell in-app advertising tools and services, including Google's (NASDAQ:GOOG) AdMob business, Apple's (NASDAQ:AAPL) iAd effort and mobile ad company Millennial Media (NYSE:MM).

For more:
- see this TechCrunch article

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