Two of the world’s most successful games–Candy Crush Saga (by King Games) and Minecraft (by Mojang)–were created in Stockholm by two very different companies. King Games just filed for an IPO that is expected to raise $500 million, and Mojang has gone to great lengths to remain independent with no investors apart from the founders.
So what do these two massively successful game makers have in common besides a postal code? We talked to the creators to find out.
The first thing you need to know is that Mojang, the company that built Minecraft, was actually started by creator Markus “Notch” Persson after a four-and-a-half year stint as a game developer at King Games (or “The Kingdom,” as employees call it.)
Yet with Mojang, Persson seems to have set out to create a games studio that’s almost the exact opposite of King Games. But how can the antithesis of a hugely successful gaming company also be a hugely successful gaming company?
Mojang and King have at least one thing in common: Their success is based on a single monster hit. King makes casual, puzzle-style games mainly played on Facebook or mobile. Although it has a portfolio of 160 games, Candy Crush Saga, which is the number one game on Facebook and iOS, still generates up to 78% of the 10-year old King’s revenue.
“The biggest play base is mobile,” says Sebastian Knutsson, chief creative officer at King Games. “On mobile when you have 2-3 minutes you can’t really play a deep strategy game. People want that bite-sized entertainment and we fit that.”
Seventy-five percent of King’s 100 million daily players gamers are women aged 25-55 and 50% have kids.
In Hong Kong alone, King has 1 million daily players out of a population of 7 million. We have almost touched every smartphone in those countries. “People ask strangers for extra lives in the subway,” says Knutsson.
With casual games like Candy Crush, gamers often only play for less than three minutes at a time but it can still take six months to get through a complete saga game. Candy Crush alone has more than 400 levels.
“We have a fairly standardized process of making a saga game,” says Thomas Hartwig, King’s CTO and cofounder. “King.com acts a testbed to try out a game concept. For creating this first game it’s a very small effort. The games which we see the audience like to play, we invest more heavily in them. Once we take the decision to make it a saga we take a two-minute game experience to a two- to six-month game experience.”
At King, typical games team consists of eight to 10 people, including graphical artists, back-end devs, game devs, producers, and a data scientist who is added during the soft launch. The data scientist’s job is to help balance the gameplay.
“Look where people are having difficulties,” says Hartwig. “Looking at the specific levels if they are too hard to manage, looking at different funnels within the game, seeing that people understand the game. At some point we start looking at other stuff too–of course monetizing features–but the gameplay is extremely important for us. King also gathers more than 1 billion data points per day on its players and uses them to optimize engagement across its multiple games.
If King feels a bit like a highly efficient, game-production factory, the three year old Mojang is a studio built around Persson’s personal mission to make the world-conquering Minecraft. Minecraft is an open games world where players build out of textured cubes as well as performing other activities like exploration, gathering resources, crafting, and combat. Persson built Minecraft as a side project while toiling as a web developer and eventually quit King to start Mojang in 2010.
Minecraft is now one of world’s best-selling games with 14 million copies sold for PC/Mac and 35 million copies on other platforms like Xbox and iOS. It’s particularly popular with children of all ages (and sometimes their bemused parents).
London’s Victoria and Albert Museum just hosted an event celebrating all things Minecraft. South Park wrote an entire episode about the game. The United Nations uses Minecraft to involve young people in urban planning. Swedish politicians use it to solicit suggestions on how to improve some of Sweden’s most troubled neighborhoods.
Neither Knutsson nor Carl Manneh, CEO of Mojang, like to talk about the money, despite the fact that both companies are making piles of it. King refuses to give out exact numbers on revenue from particular games and how many people pay for them. Manneh says that “most of the people at Mojang are not very interested in the money aspect. For the outside world that’s a stamp of success, but for us I think its most important to grow the community and have as many players as possible.”
The Atlantic reported that King made $1.88 billion last year, $568 million of which was profit. According to Swedish tech news site IT24, Mojang made $240 million in revenue and pretax profits of $89 million in 2012, with Persson personally receiving $98 million (640 million kroner) in Minecraft licensing fees. Mojang’s revenue comes entirely from sales. There are no free versions of the game.
King’s games are mostly free. “Eighty percent of the people have reached the end of Candy Crush, and it’s around 400 levels now, without ever paying anything,” says Knutsson. “We try to balance the game so it shouldn’t be a forced pay experience. It’s more about retaining the users and keeping them active. The people who pay they usually didn’t have the hours or they didn’t have the patience to keep trying a level that was difficult.” King no longer uses advertising because “an ad in a game is always a disruptive experience,” says Knutsson.
Neither Persson nor his cofounder, Scrolls designer cofounder Jakob Porser, had any experience with running a company so he brought in his former boss Manneh as CEO. Mojang’s holy trinity of Persson, Porser, and Manneh make all major decisions at the 35-man company. “We can change the strategy of the company in one evening,” says Manneh. “That’s the strength of Mojang. We are independent.”
Persson seems happy to hand off the business side to Manneh and no longer speaks to the press, only to Minecraft’s community. “Markus lets go of things that he knows that other people can do well,” says Manneh. “He wanted to focus fully on the game. Markus already had a culture set with the game and the way he interacted with the community and being very transparent with everything we do, almost like our internal communication is external. Anyone can affect anything from the game to the way we manage processes in the company. It’s easier to do that when you don’t need to answer to investors or a publisher or the stock market.”
Everything at Mojang from business decisions to decor is driven by the games and their developers. “One of our visions is to be the best company to work for in the world,” says Manneh. “So far no one has quit.” In Mojang’s first year, Persson gave away his entire dividend of about 25 million kroner [$3.84 million] to the employees. To celebrate selling 10 million copies of Minecraft, the company hired seven private jets to fly the entire company and their partners to Monaco, where they partied on the the biggest yacht in the Riviera.
Minecraft’s office looks like a cross between an English gentleman’s club and the set of a 1960s James Bond film. Pairs of Chesterfield sofas sit on a tartan carpet beneath hand-painted oil portraits of each and every staff member. The company even has its own crest. There’s movie theater/games room where the entire company plays games on Friday afternoons.
In contrast, King Games’ Stockholm office feels much more like that of a corporation. You can’t tell when you walk in that it’s a games company. Twenty percent of its 200 employees are female, a figure that Mojang certainly doesn’t match.
King is a much larger enterprise than Mojang with 550 employees and games studios in London, Barcelona, Bucharest, and Malmo. It has a complicated corporate structure with holding companies in Ireland and Malta and big-name venture capital investors like Index Ventures.
All the founders are well versed in the business side of the company. King’s management team has been with high-growth companies before. “We did all the mistakes in the late ’90s during the dotcom boom,” says Knutsson, “so we are trying to not repeat them.”
Apart from the IPO, King’s focus for the next year is firmly on mobile and on Asia. “Right now mobile is the tech vector that drives change in the games industry,” says Knutsson. “The markets we have had the best penetration in so far is Hong Kong and Taiwan.” Half of the world’s Android users are to be found in Korea and Japan alone.
Mojang launched Minecraft Realms, their own online multiplayer service, in beta at the end of last year. Currently it is only available in Sweden, with a global rollout planned in the near future.
To maintain their success, both companies will have to live up to the Mojang’s Latin motto e pluribus ludum: not one huge success, but “one of many games.”