How King Digital Entertainment PLC Differs From Zynga

These two companies are more different than most investors realize.

Mar 28, 2014 at 3:00PM

Well-placed skepticism led shares of King Digital Entertainment PLC (NYSE:KING) more than 15% lower in its IPO debut, leading some to compare the stock to that of social-games developer Zynga (NASDAQ:ZNGA). While that's understandable given history, Fool contributor Tim Beyers says the comparison fails in one key area. Zynga's revenue base is much more diverse, Tim says in the following video.

According to data supplied by, three separate Zynga games draw at least 16 million monthly active users: Texas Hold'em Poker, Words With Friends, and FarmVille 2. King also has three high-performing games, which, in total, account for 95% of bookings. Yet there's a staggering difference between Candy Crush Saga and the other two -- Farm Heroes Saga and Pet Rescue Saga. A near 3x difference in terms of monthly active users, according to For its part, King says in its F-1 filing that Candy Crush Saga accounted for 78% of bookings in Q4.

Which of these two is the better stock? Zynga, Tim says, which is slowly finding ways to generate revenue outside of Facebook. True diversity could take years, of course. At least Zynga is making progress; King has yet to prove it's more than a one-hit wonder.

Do you agree? Do you think King is the next Zynga? Leave a comment below to let us know where you stand, and whether you would buy, sell, or short King Digital stock at current prices.

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Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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