Thursday 22 February 2018

Candy Crush Saga helps Dublin-based gaming giant hit €470m profits

A woman plays Candy Crush on a smartphone. Photo: Reuters
A woman plays Candy Crush on a smartphone. Photo: Reuters

Simon Rowe

The Irish-registered firm behind hit mobile phone game Candy Crush Saga has posted profits of more than €470m for 2015.

Gaming giant King Digital Entertainment Limited, which moved its tax base from Malta to a brass-plate office in Dublin 2, recorded profits last year of $516.8m (€473m) on global revenues of almost $1.9bn (€1.7bn).

However, accounts filed in recent days revealed profits and revenues in 2015 fell slightly compared to figures from the previous year, when the firm posted profits of $574.8m (€525.9m) on group revenues of $2.2bn (€2bn).

The fall in revenue is understood to be largely due to higher sales tax, related to VAT changes in the EU that came into effect last year.

From January 1, 2015, VAT started to be charged on paid digital content (such as digital games, apps, and digital music) at the VAT rate of each EU country in which King's customers were based. Previously, digital businesses could charge VAT across the EU based on rates in the country in which its business was located.

Candy Crush Saga is a puzzle game that involves players swapping colored sweets to move through levels.

It launched on Facebook in 2012, and in Q2 2016 King recorded 409 million monthly active users across web, social and mobile platforms.

King is an independent unit of global gaming giant Activision Blizzard, which acquired the firm in February for €5.9bn.

Company filings reveal King is "in discussions with certain tax authorities" over its income tax liabilities as its seeks to resolve "uncertainties" over its worldwide transfer pricing strategies.

The documents said: "The group continues to believe that its position is robust and that it is appropriately provided for."

King has made provision for a "worldwide transfer pricing exposure" of $62.1m for 2015.

Sunday Indo Business

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