Is King Digital Entertainment PLC (KING) Another Zynga Inc (ZNGA)?


King Digital Entertainment PLC (NYSE:KING) may be going the way of Zynga Inc (NASDAQ:ZNGA), Jon Fortt said in a recent discussion on CNBC’s “Squawk on the Street”. The comments about King Digital Entertainment PLC (NYSE:KING) and Zynga Inc (NASDAQ:ZNGA) comes after the Candy Crush Saga maker reported bookings that were down more than expected for the current quarter.

Josh Brown Feels That King Digital Entertainment PLC (KING) is a One Hit Wonder like Crumbs Bake Shop Inc (CRMB)

According to Fortt, he has had reservations that King Digital Entertainment PLC (NYSE:KING) may become the new Zynga Inc (NASDAQ:ZNGA) since King Digital debuted on the stock market.

“Remember IPO day and we were talking about it and my big question was, ‘Is this Pixar or is it Zynga?’ [It’s] looking more to me like Zynga. It’s continuing ahead in that direction […],” he said.

Furthermore, like the decline of popular Zynga Inc (NASDAQ:ZNGA), notable among which is Farmville, King Digital Entertainment PLC (NYSE:KING)’s crown jewel Candy Crush Saga is also declining. Fortt reported on the data the game’s maker has revealed and why he thinks the company is in trouble.

“Candy Crush is one of a kind and it’s deteriorating. They say said that gross bookings were $611 million, down 5% quarter over quarter. Daily active users were down. Monthly unique users were down slightly quarter over quarter. Monthly unique payers [were] down. So it’s kind of like they are getting more money out of fewer payers. […] If you believe this company is worth billions and billions of dollars – market cap is, I think, still north of $4 billion, whereas Zynga is around $2.5 billion – then you have to believe that they have a platform or at least a repeatable model and they are struggling to prove that,” Fortt explained.

Meanwhile, Fortt pointed out that Zynga Inc (NASDAQ:ZNGA) once bought OMGPop in order to buy growth with cash on hand. This is a strategy King Digital Entertainment PLC (NYSE:KING) looks like it’s about to do, as they have acquired Nonstop Games, a Singapore-based company.

Disclosure: None

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