Shoreditch-based Mind Candy has reported a £2.2m loss in 2013 after a "year of transition and investment" in its mobile gaming capabilities.
The company made its name with the Moshi Monsters online game, which the company launched as a freemium mobile app back in February of this year. Along with falling subscription revenues from the Moshi Monsters online world, the Companies House filing explains: "while download numbers have been strong [for its range of apps] we have yet to find a commercial model that works at scale".
The Moshi Monsters apps rely on in-app purchases made by children playing, with MindCandy explaining at the time of launch that you can progress without paying but 'you may need to wait longer or repeat actions’. Puzzle game Moshling Rescue has drawn criticism for offering virtual diamonds for up to £59.99.
The loss in 2013 followed a rather successful year 2012, where the company made a net profit of £8.1m. Revenues fell from £46.9m in 2012 to £30.6m in 2013, with the bulk of revenue coming from sales of merchandise and the release of Moshi Monsters: The Movie.
The company has gone live with two more app brands this year – 'Instagram for kids' PopJam and World of Warriors – the latter of which has already seen 2m App Store downloads since it launched last week. Another 'free to play' offering, World of Warriors players can spend up to £69.99 on in-app purchases, but the app is targeted at an older audience.