Candy Crushed? King Entertainment Shares Fall
The maker of the popular mobile game Candy Crush Saga has seen $1.4bn (£833m) wiped from its value on weak earnings figures.
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.
King confirmed 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.
King, headquartered in London but listed in New York, saw revenues fall 5% to $611m (£363.6m) in the second quarter.
The profit warning comes as gamers apparently lose interest in Candy Crush.
The hit game 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.
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.
New titles, which include Farm Heroes Saga and Bubble Witch Saga, have yet to offset the user losses from Candy Crush.
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.