King's stocks are candy-crushed as its top toy suffers splurge slump
Game-maker admits players are splashing less cash in its flagship distraction
More than 13 per cent of Candy Crush game-maker King Digital's stock price was wiped off overnight – after it admitted players of its wildly popular mobile app were spending less and less money.
King’s results for Q1 2014, the quarter in which it launched its rather poor market debut, revealed a couple of wobbles: net profit dropped 20 per cent from the final three months of 2013 to $127m, although that figure is up 142 per cent on the year-ago quarter. King pointed out it had spent a lot of money marketing its new Farm Heroes Saga game.
Revenue was a similar picture: sales for Q1 2014 were $607m, up 195 per cent on the year-ago quarter – but up just one percent on the previous three months.
On top of stalled revenue and profit, King has seen its monthly unique payers – those who are actually coughing up cash on in-app purchases instead of just playing the games – drop to 11.9 million from 12.2 million in the previous quarter.
And the firm admitted in a conference call that players of Candy Crush Saga were spending less money in the game, Reuters reported.
The app-developer makes its money by giving its games away for free, and then charging players for in-app purchases, such as power-ups, special moves and extra lives. The firm’s most popular title, Candy Crush Saga, used to account for 78 per cent of its gross bookings, but that figure slid down to about two-thirds.
King hopes that other new titles due this year, including sequels for Candy Crush and Bubble Witch Saga and a version of Candy Crush for the Chinese market will make up for the slide in its flagship game’s popularity.
"The decline of Candy Crush Saga will be more than offset by our new IP," King's chief exec Riccardo Zacconi told analysts.
King’s stock dropped 13.38 per cent in New York to $16.25, well below its IPO price of $22.50, a dizzy height it hasn’t even come close to attaining since its debut in March. ®