King Digital (NYSE:KING) priced at the low end of its IPO range, fell on its first-day of trading, and has since trended lower. The reason is that investors are terrified of it becoming the next Zynga (NASDAQ:ZNGA). However, in its first quarter since becoming a public company, it not only has proven is that it's not Zynga -- it might even be a better investment than traditional gaming powers like Activision Blizzard (NASDAQ:ATVI).

Let's think back
In 2011, Zynga made its public market debut with the success of one game, Farmville, driving nearly all of the company's bookings. Now, two and a half years later, Zynga has lost more than 60% of its IPO value, and during its last quarter, it saw revenue decline 36%.

In 2012, Zynga had annual revenue of $1.28 billion. Over the last 12 months, revenue has fallen to $777 million, with the cause of this decline being the fall of Farmville, and the company's inability to capitalize with another blockbuster game.

Investors are frightened that the same fate will befall King. Specifically, investors were concerned that the company's total gross bookings declined from $648 million to $632 million between the third and fourth quarters of 2013. However, those fears are proving to be overblown.

What did King tell us?
In King's most recent quarter, its bookings rose to $641.1 million, showing an improvement over the fourth quarter, and proving that King's bookings are not in a Zynga-like fall. Moreover, both bookings and monthly active users rose three-fold year over year, with the latter growing 15% over the December quarter.

However, in what may be the most important metric of all, Candy Crush accounted for just 67% of the company's total bookings, which is significantly lower than its 78% share in the fourth quarter. This decline of market share, coupled with marginal growth relative to the fourth quarter, might signal that Candy Crush is slowly losing momentum, but that King is not.

King told us -- and proved -- that it's not a one-game company.

A multi-game strategy that creates value
Of course, King has the Candy Crush Saga, which has remained atop the list of top-grossing games for iOS and Android, but other games like Farm Heroes Saga and Pet Rescue Saga also place in the top 10. Not to mention, Papa Pear and Bubble Witch also have millions of daily active users each. King is a multi-game company, and unlike Zynga, is not a one-hit wonder.

For more evidence, investors can look to traditional gaming company Activision Blizzard. This is a company that recently announced earnings, has traded higher by 18% this year, and is guiding for revenue of $4.67 billion this year.

Actvision has a large portfolio of games offered on game consoles, smartphones, and PCs. Yet, despite its diversity, Actvision is solely driven by two blockbuster franchises, Call of Duty and Skylanders. Much of its gains in the last year have been due to the excitement and expectations for its game Destiny, which many believe could become its third billion-dollar franchise. The point is that even large, long-lasting gaming companies rely on certain franchises for success, and for King to be a young company, it's doing a great job at creating diversity.

Final thoughts
King's current market cap of just $5.3 billion means that the stock is trading at just 8.3 times earnings. In comparison, 8.3 times earnings is a near 50% discount to the S&P 500 and just one-third the premium of Actvision Blizzard.

While Zynga is not profitable, if we compare it to King on a revenue basis, Zynga's price/sales ratio of four is nearly twice that of King. Therefore, King has low expectations built into its stock, yet the company has given us no reason to doubt its future.

King is worth the risk. With Candy Crush remaining a top-grossing game and other titles rising up the charts, this is a stock that could trade considerably higher both short- and long-term, as the company continues to prove that it's not the next Zynga.

Brian Nichols has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard. 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.