Something didn’t go wrong for Candy Crush publisher King Digital Entertainment (KING) in the second quarter – everything did.

The number of people playing Candy Crush Saga plummeted, the number of people playing its other games grew only modestly and the number of people paying to play all of King’s games dropped. Not quite as much as King’s share price is dropping, however.

The stock, which was priced at $22.50 at the March initial public offering and has since struggled to get back to even $20, fell 23% to $14 in active trading on Wednesday.

King actually met Wall Street expectations for adjusted profit per share, at 59 cents. The company remains a cash flow machine and announced a special dividend of 46.9 cents per share payable to holders of record on September 30.

But adjusted revenue of $594 million was 3% below analysts’ expectations, according to FactSet. And a forecast of gross bookings, or revenue before payments to partners, of only $500 million to $525 million for the third quarter implied that Wall Street’s $542 million revenue forecast is absurdly high. At the ratio of gross bookings to revenue of the second quarter, that would imply less than $510 million of revenue.

“Based on the recent trends that we've discussed and the lower-than-expected bookings run rates of our games, we’re cautious about our outlook for the second half of the year,” CFO Hope Cochran told analysts on a rather terse conference call. “Therefore, we are tempering our expectations for full-year 2014.”

Drop-off hard to quantify

The source of the drop-off in play remains a bit of a mystery, Cochran and other executives said. People watching the World Cup tournament may have played less, or there could be a previously undetected seasonal element to mobile gaming, as better spring weather drew people away from their phones.

“It’s hard to quantify and hard to prove, but the things that we see externally are that January and February are very strong months as people are coming off of Christmas; they’re excited about their devices,” Cochran told analysts. “And potentially there is an impact from going into the spring and summertime that we're seeing, as well as just the World Cup and other activities that occur.”

Analysts asked about competition -- the hottest mobile game lately has been not anything from King but Glu Mobile's (GLUU) Kim Kardashian: Hollywood. But King executives pointed to industry-wide figures that showed revenue declines across most leading games. And Glu's own shares have tumbled 19% since it reported second quarter growth and a future outlook that didn't meet some of Wall Street's most optimistic projections.

King's second quarter revenue from Candy Crush declined 16% from the first quarter to $361 million. Revenue from other games, including Pet Rescue Saga and Bubble Witch Saga, rose 18% to $250 million.

That's not how King investors, including this reporter, expected the transition would run. In prior quarters, revenue from new games has more than made up for the decline in Candy Crush play. After the second quarter, the critics have the stronger position.

The problems were clearly evident in some of the player participation statistics the company released. The number of daily active users of King games declined 3% from the prior quarter to 138 million.

The number of unique people who paid to play a King game, which is closely watched by investors, dropped for the third consequence quarter to 10.3 million, a worrisome 12% decline from the first quarter. That was somewhat offset by a rise in the average amount spent per player, which increased 8% from the prior quarter to $19.52.

Still, King has one potential savior in the remainder of the year. A deal with Chinese online giant Tencent to offer Candy Crush in China is just getting started.

TenCent, which owns China’s top messaging app, WeChat, reported a 37% jump in revenue for the second quarter to 19.8 billion yuan ($3.2 billion). WeChat has almost 500 million active users and TenCent’s own smartphone mobile gaming apps garnered 3 billion yuan of revenue in the quarter, almost double gaming revenue from the first quarter.

King executives weren’t willing to guess how much that might help improve results, however.

(The author owns shares of King Digital Entertainment)