Candy Crush Is Turning Into The Next Stock Market Disaster – Gawker
Zynga learned the hard way that relying on one hit game would kill a company if the farm ever went arid. Now King Digital is proving to be another disastrous one-hit wonder with their increasingly unpopular game Candy Crush Saga.http://valleywag.gawker.com/there-is-no-ev…
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Users are growing tired of the free-to-play game, which milks money from crazed Candy Crush heads by getting them to buy extra lives and virtual goods. Now King Digital’s financial forecasts are in the toilet, the Wall Street Journal reports.
But on Tuesday the company said its second-quarter bookings fell $30 million, or 5%, from the first quarter to $611 million. The decline was primarily because of “Candy Crush Saga,” the company said.
King said it expects bookings for the current quarter to decrease to between $500 million and $525 million—a drop of 14% to 18% from the second quarter.
King’s stock plummeted following the announcement, sending shares down 21 percent overnight.
Gaming is a hits-driven business, but King hasn’t been able to find a “second act” yet, which has plagued the company’s stock price ever since it went public in March.
This is the same story that sank Zynga. The company initially went public with the success of FarmVille, but watched as they quickly lost billions and billions of dollars in value as users became bored of tilling fields. Then Zynga ground out the last few years helplessly flailing, throwing millions at any moderately popular app, hoping it would prop up the company.
King’s CEO claims that the company is working on building out a portfolio of games, telling the Journal “we see that the strategy is working overall.”
However, one financial analyst says the strategy isn’t working: “Candy Crush is declining pretty rapidly, and the other games are not growing rapidly enough.”
Let the flailing begin.
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Candy Crush Is Turning Into The Next Stock Market Disaster – Gawker
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