Mind Candy is a company operating a number of children’s entertainment brands; each with distinct business models. Indeed, Mind Candy operates an exceptionally diverse portfolio of business models for its relatively small size. Among its brands/business models are the Moshi Monsters brand (subscription-website and licensing based product model, now in decline) and the recently launched, currently non-monetized but soon-to-be platform-based Popjam social media application. Mind Candy launched “World of Warriors”, a gaming app that is free to download but includes in-app purchases (and supports some limited advertising) in October 2014. The gaming app also has a social community, a music single, and collectors cards and sticker albums. The in-app purchase element of the game (as opposed to the limited advertising element) follows a product model. This write up shall focus on this model.
World of Warriors was launched by parent company Mind Candy in October 2014 following the success, and recent decline, of its Moshi Monsters brand and by March 2015, more than 167 million ‘battles’ had taken place in the game. The launch represented its first purely mobile game and was intended to reach a broader audience of family gamers than Moshi Monsters, which was targeted at kids aged 7-13.
Mind Candy, founded in 2003, employs 170 staff and develops digitally-native entertainment brands, mostly targeted at children. Its revenues fell by 34.8% from £46.9m in 2012 to £30.6m in 2013 and the company went from an £8.1m net profit in 2012 to a £2.2m loss in 2013, following declining revenues in Moshi Monsters and significant R&D investment in both World of Warriors and Mind Candy’s new social media platform for children, PopJam.
World of Warriors operates a model similar to, and competes against, other freemium app-based games such as King’s Candy Crush Saga, Mojang’s Minecraft and Supercell’s Clash of Clans.
The business model represented by World of Warriors relies on customers who are sometimes described as “mid-core” gamers; those who have become used to simple app-based games such as Candy Crush and are ready to interact with more involving and complex titles. Demographically, these represent a slightly older, broader audience than that of Moshi Monsters, whom Mind Candy struggled to interact with responsibly (due to the consent to purchase issues with in-app purchasing for minors).
This broad audience reflects the large number of iPhone and Android users around the world with an interest in mobile app gaming. The app has already been downloaded approximately 13 million times.
Learn more about the Product Business Model
A dyadic transactional relationship where your good or service can be designed and delivered without prior interactions with the customer.
Engagement — Value Creation Proposition
World of Warriors’ value proposition is to provide a rich, “free”, gaming experience with high quality graphics and gameplay to a large number of smartphone users. They employ a scale (or “bus”) model, offering the same product to every user. Gamers can earn in-app rewards to progress through the game and collect achievements. Recently, Mind Candy has added a player versus player (PvP) element to the game that allows gamers to compete against each other and to develop followings. It is possible to play the game entirely for free, though progress will be significantly slower than that of players who opt to make in-app purchases.
Mind Candy has used broadcast media to market World of Warriors, as well as creating a community of over 133,000 fans on Facebook, Twitter and YouTube. Via separate models, Mind Candy has created collectable cards and even released a music single; both of which have helped to promote the game itself.
Delivery — Value Chain
Mind Candy is a vertically integrated business which designs and develops its games in house. These are then made available through Apple’s App Store or through Google Play to Android users. Once the app has been downloaded, users can purchase in-app content with their OS account.
Monetisation — Value Capture
World of Warriors uses the now-familiar freemium app approach. The app itself is free to download, but in-app purchases (ranging from £1.50 up to £79.99) can be made which are charged to users’ iTunes/Google accounts. Apple and Google both pass on 70% of this revenue to Mind Candy.
Disclaimer — Written by Finan Letts and edited by James Knuckles under the direction of Prof Charles Baden-Fuller, Cass Business School. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016