Does Candy Crush Have Network Effects?
I’m pretty Candy Crush Saga is a game you either love or hate. You either love it and all of its sickly-sweet, addictive action, or you hate it since of all those annoying Facebook notifications you get from friends pestering you to play the game. Regardless of whether you think this conclusion is valid or not, I’m certain that we can all agree that Candy Crush Saga is an incredibly – insanely – social game as it urges you to compete with online friends and actively incentivizes you to share the game on social media. This, along with how the creator of Candy Crush, King, was bought by Activision just two weeks ago for a whopping 5.9 billion dollars, got me thinking. With online social interaction so deeply enrooted within the game, is Candy Crush Saga a good that has networks effects?
As we know from lecture, a good with network effects is a good where a person’s use can impact the value of the good for other people. With such a competitive leaderboard system that encourages competition between friends built into the game, Candy Crush clearly is impacted by network effects. This is because many players who play Candy Crush like to compete with friends in the leaderboard and boast about their scores. The more friends they can compete with and boast to, the happier these hardcore candy crushers are, thus increasing the value of the game to them. However, if we dig deeper into the details, we can see that the relationship goes much further than that.
I spent some time searching for the user statistics of Candy Crush Saga online, and compiled the results in the graph above. Candy Crush was released on Facebook for PCs in Q1 2012, and later released on mobile platforms in Q4 2012. While 20 million users and growing back in early 2012 was obviously nothing to scoff at, the growth rate was clearly stalling between Q2 and Q3 of 2012. While Candy Crush had stormed through the tipping point z’ pretty fast because of good marketing and King’s large fan-base, the Candy Crush’s PC release was nearing its second equilibrium z’’ in Q3 2012. However, lucky for King, they had the brilliant idea to release it on mobile devices, which led to its popularity to increase exponentially. Like all goods that have network effects, the popularity of Candy Crush doesn’t just skyrocket the moment the mobile release comes out. Instead, it takes some time for fans and candy addicts to spread the game to friends. Before long though, the number of players double between Q4 2012 and Q1 2013, and it nearly doubles again between Q1 2013 and Q2 2013. This rate of growth later slows down in the following months, telling us that it was nearing its second equilibrium. Finally, by Q1 2014 the growth of Candy Crush Saga seems to have stopped, which tells us that it had reached the second equilibrium.
http://www.wired.com/2015/11/activision-acquires-candy-crush-maker-for-5-9-billion/
http://www.businessinsider.com/king-digital-stock-analysts-candy-crush-saga-2015-2?r=UK&IR=T
http://www.statista.com/chart/1922/few-users-actually-pay-for-candy-crush-and-co/