The world was once crazy about candy crush…maybe some parts are still crazy, but the company is fast losing everything it gained when the world loved it.
Candy Crush first hit the market just over two years ago and its meteoric rise saw it downloaded more than half a billion times.
And investors loved the company’s success so much it valued it at $7.62 billion when the company went public earlier this year. But that investor love is gone now that Candy Crush’s growth is gone.
According to results from its parent company, King Digital Entertainment, the game’s monthly active users increased only 1 per cent while the daily active users actually dropped 3 per cent. It’s bad news in an industry where investors are looking for much higher growth.
Shares of King Digital Entertainment plummeted to an all-time low when King revealed its earnings. It sank a whopping 23.1 per cent to $14 following second-quarter results that Deutsche Bank described as a “crushing disappointment.” King’s previous low was $16.46 on May 13. The company launched its public offering in New York in March.
“Candy Crush declined more than we had expected,” said King Digital chief executive Riccardo Zacconi, adding that other leading games such as Farm Heroes Sage and Pet Rescue Saga were not strong enough to make up for the loss.
Company executives blamed rising competition from new entrants, including the Kim Kardashian: Hollywood game, the reality-show star’s offering in which users are invited to “create your own aspiring celebrity and rise to fame and fortune.”
Zacconi said the Kardashian game has “risen very fast” and “clearly has a strong overlap with our demographic.” He also cited the popularity of the rising puzzle game 2048.
In its results on Tuesday, King said net income rose 31.3 per cent to $177.74 million compared with a year ago. But user results were tepid in some key areas compared to the prior quarter.
King’s gross bookings rose 27 per cent from a year ago to $656.71 million, but fell five per cent compared to the first quarter, primarily due to a weaker performance from Candy Crush.
The number of monthly active users rose one per cent from the first quarter, but daily active users dropped three per cent.
Some analysts have considered King Digital vulnerable because of the importance of the Candy Crush title to its results.