Glu Mobile’s Smartphone Revenues Climb to $9.7M in Third Quarter
Glu Mobile said its smartphone earnings climbed to $9.7 million in the third quarter, up more than fourfold from a year earlier when it brought in $2.4 million in the same quarter. Smartphone revenues were nearly flat quarter-over-quarter, however, with 2 percent growth from the $9.4 million seen in the second quarter.
Overall, total revenues were up 9.3 percent year-over-year to $16.9 million, higher than the $15.5 million it earned at this time last year. Glu Mobile’s losses deepened to $6.2 million for the quarter, up more than threefold from a year earlier because of costs associated with acquiring Griptonite and Blammo Games. The company’s shares were flat on the day at $3.66.
Glu said it may bring in between $16 and 17 million in revenue this quarter, based on non-generally accepted accounting principles. Smartphone revenue may come in at between $11.5 and $12 million while Glu’s net loss may widen to between $6.3 and $7.2 million. The company said the two acquisitions will start to pay off next year, when Griptonite will bring six titles to market in the first half. Blammo will start shipping games around the turn of the year.
Glu Mobile’s shares have seen the best of times and the worst of times this year, swinging to a four-year high of $6.10 during the summer when many mobile gaming companies were benefiting from speculation around forthcoming Zynga’s initial public offering. At that time, the ramifications around the loss of offer walls also weren’t fully understood. Glu said today that the loss of offer walls, which make it cheaper to acquire new customers and easier to bring in revenue for users who don’t like to pay for virtual goods, created a “$3 million headwind” on the iOS platform this quarter.
Since the summer, Glu has had major executive level changes, with a major restructuring in August that saw its head marketing executive and chief creative officer leave. It also took a major bet in acquiring Blammo and Griptonite for stock and earnouts that are potentially worth more than $50 million.
Glu now has to prove that those two deals are worth their risks and that it can compete with a coterie of young gaming companies like TinyCo, Pocket Gems and Storm8 that have done well in the casual and RPG genres. Having gone public before the original Apple iPhone launched in 2007, Glu has had to make a necessary, but risky, leap from feature phone to smartphone gaming.
Overall, Glu Mobile’s saw 131.3 million cumulative installs in the third quarter on iOS and Android. Glu’s monthly active and daily active usage also grew. The number of monthly active users or MAU rose 33.7 percent to 22.1 million while the number of daily active users climbed 22.1 percent to 2.1 million users.
The company said Android revenues doubled this quarter and the platform now contributes 30 percent of Glu’s overall smartphone revenue. While installs on Google’s platform are beginning to outpace iOS downloads, Glu is still predicting that Apple’s app store will be more lucrative in the short term, but Glu is “optimistic that Android will be outstripping iOS to a great extent by next year, even if users do not achieve parity.” (They told us back in May that Android revenues were one-eighth to one-tenth of what they were on iOS.)
Glu said its most lucrative games were Gun Bros and Contract Killer, which brought in $1.5 and $1.8 million respectively in revenues during the third quarter. Contract Killer’s zombie themed spin-off, Contract Killer: Zombies was also Glu’s most successful launch to date, both in terms of downloads and gross revenues. The size of an average in-app purchase also rose to $6.40 from $4.07 due to higher prices on virtual goods. The raw number of in-app purchase transactions actually fell, however, from 999,000 to 866,000.
The company also revealed new plans to support Amazon’s Android appstore by supporting the new Kindle Fire with half a dozen titles. It also showed off nine titles it plans to debut in the fourth quarter, ranging from casual titles like Boo Town and Toy Village to games in the hardcore genre like Frontline Commando. The company also plans to beta launch its China-focused gaming portal, glu.cn, in 2012.