King Entertainment, the team behind Candy Crush Saga has seen $1.4bn (£833m) wiped from its value on weak earnings figures as gamers seem to be losing interest in the ‘freemium’ puzzle game.
King saw revenues fall 5% to $611m (£363.6m) in the second quarter. Candy Crush saga was responsible for 59% of gross bookings – payments for in-game upgrades such as short-cuts, extra playing time and virtual goods – this quarter, compared to 67% in the first quarter of 2014.
There was a 22% decline in King Digital Entertainment’s share price in after-hours trading on the New York Stock Exchange when a profits warning was announced alongside its results for the second quarter of 2014.
Investors have worried that unless King delivers a set of consistent and long-lasting hits, apart from Candy Crush Saga it might suffer the same fate as Farmville maker Zynga and Angry Birds developer Rovio, which are struggling to retain players.
New titles, which include Farm Heroes Saga and Bubble Witch Saga, have yet to offset the user losses from Candy Crush.
King made an unusual payout to its shareholders of $150m (£89.3m) but that failed to appease investors who were concerned by its performance just five months after its rocky stock market debut.
Chief executive of King Digital Entertainment Riccardo Zacconi denied that the company’s results reflected the end of the casual-gaming boom, but admitted that Candy Crush had declined “more than we expected”.
The strong market reaction is likely to be a result of concerns that King has not yet created a game to rival Candy Crush for popularity.
Although the amount of unique users per month across King’s offering of games has surged to 345m from 194m last year, investors fear that unless King delivers other hit games it may struggle to retain players.
