King Digital Entertainment, the maker of hot mobile game Candy Crush Saga, has had a disastrous public debut. Shares plummeted 16 percent yesterday, marking the worst first-day of trading of any IPO so far this year, and slid another 3 percent today.

Investors, it seems, aren't willing to bet on a company that's revenue is so heavily concentrated in one basket, albeit a wildly popular one. While the company has an intellectual property portfolio of 180 games and counting, Candy Crush Saga generated a whopping 78 percent of King's bookings (the gross amount paid by users for games and virtual items) in the fourth quarter of 2013.

What happens, then, when Candy Crush mania begins to fade? One only has to look as far as Zynga, maker of the once ubiquitous FarmVille, for a possible trajectory. Its stock price is half of what it was when it went public in 2011, and its revenues have suffered as the company has failed to produce another hit game.

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Dismal predictions aside, King Digital Entertainment is currently a profitable company. Unlike recent IPO superstars like Twitter and Zulily, the company had a profit before going public, generating $568 million in net income in 2013 on revenues of $1.9 billion.

So what does it mean when an insanely popular -- arguably the most popular -- mobile game company's initial public offering tanks?

According to Jay Ritter, a professor and IPO expert at the University of Florida, it's an indication that investors are weary of the 'one-hit wonder' effect. "The market is viewing the company as one whose profits are temporarily high from a successful game," he says. "The business is similar to producing movies—a blockbuster will temporarily lift profits, but to maintain profits, the company must continue to produce blockbusters, which is hard to do."

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In other words, for all its profitability, King Entertainment failed to convince investors that it can create a string of hits. Ritter predicts that the drop in King Digital’s price will have a modest negative impact on the ability of private gaming companies to raise funds. "Financiers focus on both the business model and public market valuations," he says. "Companies with a business model that looks like it has a good probability of success will be able to raise funds, although at slightly lower valuations."

George Deeb, a managing partner at Chicago-based startup consulting firm Red Rocket Ventures, doesn't think that King Digital's disappointing IPO will have much of an effect on private mobile gaming companies' ability to get funding.

That's because Zynga has already dragged the cat out of the bag; most venture capitalists didn't need King Digital's disappointing IPO to show them that like restaurants, mobile games have a very short shelf-life, Deeb says. "We already know that there needs to be a continuous pipeline of new games, so as one game goes out of favor there is one to replace it."

The bar has been raised; a single cash cow, no matter how lucrative, is not enough. Instead, mobile gaming companies now have to prove they have a host of juicy calves waiting to be brought to pasture. And that's hard to do.

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