'Candy Crush Saga' Maker Files for IPO

Could King's online gaming IPO be as risky as the Zynga stock flop?

A man plays "Candy Crush Saga" on his iPhone Jan. 25, 2014, in Rome.

King Digital Entertainment's popular "Candy Crush Saga" helped the company generate $1.88 billion in revenue in 2013.

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King Digital Entertainment, the maker of mobile games including “Candy Crush Saga,” registered for an initial public offering of stock with the Securities and Exchange Commission on Tuesday, but the company may be a risky investment given the fleeting popularity of hit games.

[READ: Are We Headed for a Tech Stock Bubble?]

Ireland-based King filed with the SEC to be listed on the New York Stock Exchange using the ticker ”KING,” without disclosing how many shares it wants to sell or the price range for the stock.  

King's growth is driven by “Candy Crush Saga,” which launched in 2012. During 2013, the company profited by $568 million after generating $1.88 billion in revenues. That allowed King to recover from a loss of $1.3 million in 2011, when it only generated $64 million in revenues before the release of the hit game.

The stock market remains favorable to Internet companies, and others – including mobile payment company Square and cloud computing company Box – may be planning to go public during 2014.

Now is a good stock environment for Internet companies to go public, but gaming companies are a risky investment, says Santosh Rao, senior research analyst at Citizen.VC, a Silicon Valley-based venture capital firm.

[ALSO: Zynga Founder Steps Down in Favor of Former Xbox Innovator]

Zynga went public in 2011 and enjoyed success from its once-popular “FarmVille” game, but the company’s stock has plummeted since then, peaking at $14.69 in February of 2012 and trading at about $5 on Tuesday. That shows the risk of investing in a company like King, whose profits are dominated by one hit game, Rao says. He adds that he "would not buy any of their stock.”

“One good thing going for King is that it is mobile-based, and does not have to transition to mobile from desktop computers the way Facebook and Zynga did.” Rao says. “King has to keep innovating, though. Zynga lost money after it focused on one or two hit games.”

Zynga and King also have been getting revenue from online gambling in countries like the U.K., and are keeping an eye on regulation in the U.S. for the chance to market real-money gambling on social networks.