Shares in King, the maker of the astoundingly popular mobile game Candy Crush, fell more than 14% in after-hours trading yesterday after the company issued a profit warning.
King Digital said also that fluctuations in foreign currencies and a lack of new game releases would inhibit its earnings growth in the current quarter.
Shares in Candy Crush maker King slide
The huge drop in the share price came despite the fact that first quarter sales actually beat the market’s expectations. But the firm has been struggling to increase market share in an increasingly competitive market.
King Digital’s revenue fell 6.1% to $569.5m in the first three months of the year from a year ago, but that was higher than analysts’ forecasts of $563.4m.
The London-based games company said that its gross bookings (i.e. what players spend before costs such as app store fees) between April and June would be between $490 million and $520 million, which was below expectations.
“We look toward the remainder of the year, we expect the mid-year period to be seasonally softer, returning to growth trends in the latter part of the year“, the company said in a statement on Thursday.
King Digital is said to be launching a new game this year, but that’s expected to be in the latter half of the year. The company said that falls in gross bookings and revenue in the first quarter were mainly a result of lower sales from Candy Crush Saga and other more mature games titles, which is perhaps a sign that many players are at last moving on to other games.