Market sours on King Digital as Candy Crush sags

Shares of King Digital Entertainment plummeted to an all-time closing low Wednesday as the British videogame developer's earnings suggested diminishing consumer taste for signature game Candy Crush Saga.
King Digital sank 23.1 percent to $13.99 following second-quarter results that Deutsche Bank described as a "crushing disappointment."
King's previous low was $15.32 on May 13. The company launched its public offering in New York in March.
In its results on Tuesday, King said net income rose 31.3 percent to $165.4 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 percent from a year ago to $611.1 million, but fell five percent compared to the first quarter, primarily due to a weaker performance from Candy Crush.
The number of monthly active users rose one percent from the first quarter, but daily active users dropped three percent.
"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.
Some analysts have considered King Digital vulnerable because of the importance of the Candy Crush title to its results. Deutsche Bank downgraded King to "hold," citing "deteriorating monetization across the portfolio."
Bank of America Merrill Lynch rated the stock "neutral," saying the King's outlook for new bookings was disappointing, but that profit margins were "strong."