Candy Crush maker King Digital’s shares dive as game matures
King Digital Entertainment’s stock plummeted more than 13 per cent on Wednesday as signs that the maker of hit mobile game Candy Crush Saga may be losing steam overshadowed the firm’s better-than-expected quarterly results.
Reporting for the first time since a disappointing initial public offering earlier this year, King told analysts on a conference call that some players of its two-year-old signature title were spending less money in the game as it matures.
Candy Crush accounted for two-thirds of the firm’s gross bookings in the first quarter, down from 78 per cent in the previous quarter.
Total gross bookings rose just 1 per cent from the fourth quarter. And though revenue from in-game purchases increased, monthly unique payers – gamers who spend money in King’s titles – dropped to 11.9 million from 12.2 million in the previous quarter.
Moreover, while King’s net profit of US$127 million was more than double the US$53 million a year earlier, it was 20 per cent below the US$159 million in the previous quarter.
Executives said the firm incurred expenses in marketing its new Farm Heroes Saga game in the first quarter.
King’s shares dropped to US$16.25 in late afternoon trading. The stock has not approached its IPO price of US$22.50 since it began trading in March.
Arvind Bhatia, an analyst with Sterne Agee, said Candy Crush was fading sooner than expected.
Investors have long warned about the fickle nature of the mobile gaming industry, where titles can race to the top of app-downloads charts but go downhill just as quickly.
King plans to launch new titles in the second half of the year, including a version of Candy Crush for the Chinese market this summer.