Shares of the maker of popular mobile game Candy Crush fell as much as over 14% in after hours trading after it warned of weaker profits.
King Digital said it expects fluctuations in foreign currency and a lack of new releases to hold back its earnings in the current quarter.
The big drop in its shares came despite the release of first quarter sales figures that beat market expectations.
The firm has been struggling to increase market share.
King Digital's revenue fell 6.1% to $569.5m (£361m) in the first three months of the year from a year ago, but that was higher than analysts' forecasts of $563.4m.
However, the London-based game maker said its gross bookings, which is what players spend before costs such as app store fees - for the April to June period would be between $490m and $520m - below expectations.
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