Tech can be a fickle ole indudstry. Just three months ago, things were looking a bit sweeter for mobile games maker King, with first quarter revenues beating expectations and profits tripling, in its first set of results after what was a pretty disastrous IPO. It was also weaning itself of cash cow Candy Crush, which at one point accounted for 78% of income.
But another quarter down the line and things have soured somewhat. Second quarter reported revenues rose 30% to $594m (£353m), but analysts had expected $606m. Bookings - in-game purchases including lives and boosters - fell 5% from the previous quarter to $611m, as gamers start to lose their appetite for Candy Crush.
That meant King had to slash its earnings forecasts: it now expects in-game purchases to total $2.25bn-$2.35bn this year, compared to its previous estimate of $2.55bn-$2.65bn. Shares duly plunged 22% in after-hours trading in New York yesterday.
‘Candy Crush declined more than we had expected,’ King chief exec Riccardo Zacconi said. ‘Our non-Candy Crush games did not grow as much as we had expected and, as a result, did not offset the decline in Candy Crush.’
The British company, which spurned the London Stock Exchange to list in New York, looks in danger of repeating the fate of US games maker Zynga, whose shares sunk as low as $2.09 last year after floating at $11 in 2011, when it failed to repeat the success of its Farmville game. None of King’s new games have come close to matching Candy Crush and investors’ reaction tos the results show they are getting increasingly impatient waiting for the next big hit, even though it only IPO-d in March.