King Digital winning, Zynga losing in games wars

King Digital winning, Zynga losing in games wars
Mascots dressed as characters from the mobile video game "Candy Crush Saga" pose during the IPO of Mobile game maker King Digital Entertainment Plc on the floor of the New York Stock Exchange March 26, 2014.

The fickleness of the gaming industry was on full display in the earnings reports of "FarmVille" creator Zynga Inc and "Candy Crush" maker King Digital Entertainment Plc.

Zynga's shares fell 10 per cent while King Digital's soared 18 per cent in extended trading on Thursday after the companies reported contrasting fortunes in a key industry metric.

King's total gross bookings, an indicator of future revenue, increased 8 per cent to $586 million in the fourth quarter, about $45 million more than the average analyst forecast.

Zynga reported bookings of $182.4 million, about $19 million less than expected, according to research firm StreetAccount.

The company, whose market value hit more than $14 billion in 2012, lost most of its shine after failing to come up with new games to match the popularity of "FarmVille".

It was also caught off guard by mobile-focused rivals such as Dublin-based King Digital and Supercell, the maker of "Clash of Clans" and is now valued at about $2.4 billion.

King, which went public last March, has a market value of about $4.6 billion.

Zynga said on Thursday it would launch six to 10 new mobile titles this year as it tries to reverse its fortunes. "We will deliver a 100 per cent mobile-first new product slate featuring new games, with a goal of ending 2015 with more than 75 per cent of our fourth quarter bookings coming from mobile," Chief Executive Don Mattrick said in a statement.

King, which already gets 78 per cent of its gross bookings from mobile, launched a portfolio of hit new games last year, including the popular "Bubble Witch 2 Saga" as well as a new version of its smash hit "Candy Crush Saga".

That helped it to avoid the fate of Zynga and "Angry Birds"developer Rovio Corp, which is also struggling to grow.

King Digital's revenue and profit easily trumped market estimates as its newer games more than made up for the declining popularity of older titles.

Zynga's main launch, the multi-player word game "Words with Friends", failed to excite gamers and launches aimed at the Chinese market failed to live up to expectations.

The company said it would close its Beijing office and lay off all 71 employees.

Zynga's forecast for bookings in the current quarter also fell far short of estimates, according to StreetAccount.

Up to Thursday's close of $14.74, King Digital's shares had risen 10 per cent in the past six months. Zynga's shares had fallen 7 per cent to $2.66.

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