Largest Companies in App Investing

The mobile application market can seem overwhelming due to the sheer number of apps being released. Indeed, the statistics portal Statistica reveals that there were 1.4 billion apps on the market, as of January 2015. However, only a small portion of these apps are making significant revenue. This article looks at the top app development companies, whose blockbuster applications dominate the mobile application market.
King Digital Entertainment PLC
Annual Revenue: $2.26 Billion
While you might not recognize the name King, you will certainly recognize the applications that this app maker produces. The creator of Candy Crush Saga, Farm Heroes Saga and Pet Rescue Saga, among others, King is a leader in the mobile entertainment industry. With more than 185 apps available in 200 countries and regions, it’s reach is impressive. As of Q1 2015, the app maker has an average of 364 million unique users.
Its finances are also impressive for those interested in app investing: mobile gross bookings reached an all-time quarterly high of $491 last quarter, representing 7% sequential growth. CEO Riccardo Zacconi says “Our first quarter 2015 results demonstrate the continued strength of our franches, with Candy Crush Saga, Candy Crush Soda Saga and Farm Heroes Saga remaining top 10 grossing games in the Apple App Store and Google Play Store in the U.S.”
Supercell Oy
Annual Revenue: $1.7 Billion
Supercell is a privately held mobile game developer, headquartered in Finland with offices in San Francisco, Tokyo, Seoul and Beijing. The app maker is discerning about the games that it produces, aiming for longevity in its applications. As such, it has only three game titles on the market: Clash of Clans, Hay Day, and Boom Beach.
This approach appears to be paying off. In 2014, it doubled its earnings and tripled its revenue, reaching $565 million and $1.7 billion, respectively. Supercell’s games are free, with profits emerging from in-app purchases to enhance the gaming experience.
Gungho Online Entertainment, Inc.
Annual Revenue: $1.42 Billion
GungHo Online Entertainment entered the field of online entertainment through PC gaming, but has diversified to focus on mobile entertainment platforms. The developer of Puzzle & Dragons, Freak Tower and Princess Punt, Gungho had a gross profit of $963.6 last year (although not all of it stemmed from mobile applications). Most notably, the app maker was able to decrease the percentage of sales dedicated to the cost of goods sold from 32.58% to 32.35%. This decrease helped to establish a bottom line growth from $450.7 million to $510.6 million in the past year.
GREE
Annual Revenue: ¥125.6 Billion
Like Supercell, GREE is a leader in the free-to-play mobile games market, with applications like War of Nations and Knights & Dragons available on Google Play and the iOS App Store. In 2014, GREE reported revenue of ¥125.6 Billion, a decrease from ¥125.6 in 2013, and an even further decrease from ¥158.23 in 2012, when revenue peaked for this company. However, despite these decreases, GREE remains an important player in the mobile application world.
LINE
Annual Revenue: ¥86.3 Billion
LINE is an exciting Japan-based company, which emerged out of the eponymous instant-messaging app. The free, internet based communication application works much like WhatsApp and Facebook Messengers. However, what distinguished LINE was the inclusion of emotive stickers as part of its platform.
In 2014, it had a reported revenue of $656 million. Now, it is starting to expand into the U.S. market, where it already has 27 million subscribers, and 4 million active subscribers. The future of what Fast Company calls a “Disney-meets-Skype-meets-Facebook” app appears to be very promising indeed.
 

Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.