King And Zynga Inc (ZNGA), A Few Noticeable Differences

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King And Zynga Inc (ZNGA), A Few Noticeable Differences
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King, the developer of the Candy Crush Saga, is trying to go public, and many analysts and market watchers are expecting the game developer to share a similar fate with Zynga, which is trading currently at 40% of its debut price. However, this might not hold true in King’s case, says a report from Business Insider.

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Difference in ownership, management style

The management and ownership structure of King is entirely different from that of Zynga Inc (NASDAQ:ZNGA). The management style of ex-CEO Mark Pincus was aggressive, and he held 18.1% of Zynga’s stake at the time of IPO, which was way ahead any other individual employee.

There is no concrete information about King’s ownership structure as the game maker has filed a “confidential” S-1 under the Jobs Act. The freemium game developer was established in 2003 as Midasplayer International Holdings Co. by six former employees of a company called Spray. The company got an investment of $50 million from Apax Partners and Index Ventures in 2005 to fund the development of a web based “skill game” platform. Funding provided to King along with the number of founders of the company indicates that the share of CEO Riccardo Zacconi is less than that of Pincus in Zynga Inc (NASDAQ:ZNGA).

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Also, King’s managerial authority is not centralized like that of Zynga’s. Business of King seems to be more conservative and carefully planned compared to Zynga in December 2011, says the report.

Difference in employee tactics

Zynga Inc (NASDAQ:ZNGA) added aggressively to its employees strength by acquiring other startups prior to the launch of its IPO. The company acquired another 20 companies before IPO. Some of them are; YoVille (2008, coincided with $29 series B investment), MyMiniLife (2009), Serious Business (2010). On the other hand, King has only announced one acquisition in its 10 year history.

Mobile pipeline strong for King

King keeps on testing the new titles by offering them to the ten million of users of king.com platform before porting the game on the mobile. This strategy allows the company to maintain a portfolio of properties without spending a great deal of money on marketing. King simply needs to launch its more than 150 games available on the web platform to mobile, which will be enough for almost two years without developing new IP. On the other hand, Zynga Inc (NASDAQ:ZNGA) utilizes all its resources on one platform at a time.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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