Mobile Game developer developer, King entertainment has reduced it growth forecast for 2014 after gamers have started spending less on its highly popular mobile game, Candy Crush Saga
As per the latest earnings report, the company said tat it has reduced its 2014 forecast and expects gross bookings in the range of $2.25 billion to $2.35 billion, down from its previous estimate of $2.55 billion to $2.65 billion.
King entertainment, which went public in March, also announced a $150 million special dividend, or 46.9 cents per share, payable to shareholders of record on Sept. 30. However, its shares slipped by 22% to $18.20 on New York Stock Exchange.
CEO Riccardo Zacconi said in an interview
We have seen a step down in monetization in the latter part of Q2 and so we have adapted the view forward.
Investors appear to be loosing faith in the company. They have fears that if King doesn’t come out wit more popular hits other than sticking to just one, it might go down the same way as Zynga ( developer of Farmville ) and Rovio ( developer of Angry Birds). Both these companies are struggling to retain their current players.
King’s second-quarter gross bookings, were $611 million, up 27 percent from the year-ago period, but less than the last quarter, when it reported gross bookings of $641.1 million.
CFO Hope Cochran said in an interview
We expect Candy Crush will decline, but have a very strong tail and a long tail. We will be launching the Candy Crush sister title in Q4, which will give more longevity to that title.
The company reported revenue of $594 million for the second quarter ended June 30 compared with $456 million in the year-ago period. This figure, is way behind the $608.3 million, which analysts like Thomson Reuters I/B/E/S expected.