“Everything starts with an active audience.”
Those are the words of SessionM co-founder and CEO Lars Albright as he breaks down the success of his company’s new partnership with Glu Mobile.
“Everything starts with an active audience.”
Those are the words of SessionM co-founder and CEO Lars Albright as he breaks down the success of his company’s new partnership with Glu Mobile.
Mobile game developer and publisher Glu Mobile today reported total non-GAAP (generally accepted accounting principles) smartphone revenues of $17.1 million for Q1 2013, falling by 7.6 percent from Q4 2012′s $18.5 million, and by 1.7 percent from Q1 2012′s $17.4 million. iOS and Android accounted for 91 percent of Glu’s smartphone revenue, marginally down from 92 percent in Q4 2012.
Glu also cut staff yesterday in an effort to reduce the number of its development studio teams and eliminate certain research and development positions. The reduction in staff was equivalent to circa 12 percent of this year’s starting headcount of 564 employees. Glu also made this decision to enable it to hire additional monetization, live operations, server technology, user experience and product management personnel to support Glu’s transition to becoming a games-as-a-service (GaaS) company. Glu plans to bring headcount up to 580 by year’s end. Restructuring will complete no later than June 30, 2013. Glu did just hire Chris Arkhavan as president of publishing, who is focusing on growing advertising revenues, increasing direct marketing efficiencies and overseeing third-party publishing.
The company’s total revenue for the first quarter of 2013 was $19.0 million, down 12 percent from $21.6 million in Q1 2012, and fell 8.7 percent quarter-over-quarter from total revenue of $20.8 million in Q4 2012. Non-GAAP operating loss was $2.2 million in Q1 2013 compared to Q1 2012′s $23,000 and Q4 2012′s $2.5 million. Glu’s non-GAAP net loss was $2.3 million in Q1 2013, resulting in a non-GAAP earnings per share (EPS) loss of $0.03.
“I’m pleased with the moentization progress we made in Q1 and the steps we are taking to maintain this momentum,” de Masi says.
The San Francisco-headquartered game studio released seven freemium games in Q1 — Dragon Storm, Stardom: Hollywood, Gun Bros 2, Small City, Samurai vs. Zombies Defense 2, Heroes of Destiny, and Frontline Commando: D-Day. Titles released in Q1 2013 accounted for 16 percent ($2.66 million) of non-GAAP smartphone revenue this past quarter. Glu now plans to launch 12 first-party titles in 2013, with five already out. In March, Glu, in partnership with mobile gambling service Probability PLC, launched its first real-money game title Samurai vs. Zombies Defense Slots for the web in the U.K. Glu also announced today’s launch of another slots game in partnership with Probability with Contract Killer Slots in the U.K. Lastly, Glu began development on a Glu-IP-branded mobile casino suites game, which is expected to launch in the U.K. by Q3 2013.
Daily active users (DAU) rose from 3.5 million in Q4 2012 to 3.9 million in Q1 2013. Monthly active users (MAU) also increased, moving from 34.8 million in Q4 2012 to 40.1 million in Q1 2013.
In Q1 2013, Glu’s average revenue per daily active user (ARPDAU) was 6.4 cents, down from 6.7 cents in Q4 2012. The average for the percentage of MAU converting to paid users stood still at 0.7 percent. Stardom: The A List once again had the highest ARPDAU at 8.3 cents, although that figure fell from 9.1 cents in Q4 2012. The female-focused game also had the greatest conversation rate, converting 1.2 percent of MAU to paid users. Contract Killer 2 led all Glu titles again as the game with the most DAU, with 292,000 DAU. Heroes of Destiny and Dragon Storm, two Q1 2013 releases, broke Glu’s own ARPDAU records. As for Glu’s third-party publishing efforts, the game house plans to launch six titles globally by December 2013.
Glu’s most lucrative title for Q1 2013 was Eternity Warriors 2, which generated $2.1 million in non-GAAP revenue. Another notable title was Contract Killer 2, which raked in $1.8 million.
For Q2 2013, Glu estimates non-GAAP smartphone revenue between $15.2 million and $16.2 million. Glu now predicts between $80 million and $84 million in smartphone revenue for the 2013 fiscal year, down from the company’s prediction of $84 million to $88 million it provided in the Q4 2012 earnings release. As of March 31, 2013, Glu finished the quarter with a cash balance of $21.2 million and no debt.
Glu’s stock price dipped 7 cents after the release of its earnings report to $3.01 per share, with a market cap of $200.5 million. In after hours trading, the stock dropped even more to $2.90.
Glu Mobile today announced the launch of the company’s first real-money gambling game in the U.K. The game was made possible through the company’s partnership with mobile gambling service Probability PLC.
The title is a slots game featuring intellectual property from the mobile game developer and publisher Glu’s Samurai vs. Zombies Defense game. The game, titled Samurai vs. Zombies Slots, is browser-based, and only available on Probability’s network in the U.K. Probability will also distribute the game through its U.K. betting firm partners like Paddy Power, William Hill and Probability’s white label partners.
“We are pleased to expand our mobile portfolio to include real-money gambling,” says Niccolo de Masi, Chief Executive Officer of Glu Mobile, in a statement. “We anticipate that real-money gambling will continue to gain momentum globally and believe that with this offering, Glu is well positioned to capitalize to the extent that additional markets adjust regulations. We plan to leverage Probability’s extensive partner network to further extend Glu’s successful original IP to new demographics.”
The partnership between Glu Mobile and Probability is structured in such a way that Probability provides a comprehensive operational role, accepting all real-money gambling regulatory responsibilities.
Glu’s stock closed today up 16.94 percent to $2.83 a share, following the announcement for the real-money gambling title’s release. Glu’s Q4 2012 earnings showed that the company’s revenues were up 1 percent quarter-over-quarter to $18.5 million, and up 24 percent year-over-year.
Glu Mobile today reported total non-GAAP (generally accepted accounting principles) smartphone revenues of $18.5 million for Q4 2012, up slightly by one percent from Q3 2012′s $18.3 million, and up 24 percent from Q4 2011′s $15 million. iOS and Android accounted for 92 percent of the mobile game developer and publisher’s revenue, barely down from Q3 2012, where games on Apple and Google’s mobile platforms accounted for 93 percent of Glu’s sales.
The company’s total revenue for the fourth quarter was $20.8 million, up 4 percent from total revenue of $20.1 million in Q4 2011, although down two percent quarter-over-quarter from total revenue of $21.2 million in Q3 2012. Non-GAAP operating loss was $2.5 million for the quarter compared to Q4 2011′s $1.2 million and Q3′s $2.7 million. Glu’s non-GAAP net loss was $3.2 million in Q4 2012, resulting in a loss of $0.02 per share.
According to Glu Mobile CEO Niccolo de Masi, smartphone revenue was flat compared to Q3 2012 due to the company’s decision to delay the global launch of approximately half of its Q4 2012 titles.
In Glu’s earnings call, he said the delay allowed Glu’s recently appointed president of studios Matt Ricchetti to improve ARPDAU for those games.
The San Francisco-headquartered company launched four freemium games in the fourth quarter including Death Dome, Contract Killer 2, Dragon Slayer and Contract Killer Zombies 2. The four titles 4 accounted for 21 percent of non-GAAP smartphone revenue in the same quarter. Glu plans to launch five titles in Q1 2013, none of which have been released yet, and 15 titles in total for 2013.
Daily active users (DAU) dropped from 3.8 million in Q3 to 3.5 million in Q4. Monthly active users (MAU) also fell from an 37.7 million in Q3 to 34.8 million in Q4.
This quarter, only Glu’s average revenue per daily active user (ARPDAU) figure fell quarter-over-quarter from 7.5 cents in Q3 to 6.7 cents in Q4, while the average for the percentage of MAU converting to paid players remained the same at 0.7 percent. Stardom: The A List continued to have the highest ARPDAU at 9.1 cents, despite being down from 11.1 cents in September 2012. Although the female-focused game was dethroned as the conversation rate leader by Deer Hunter Reloaded, which had converted 0.9 percent of MAUs to paid users. Stardom: The A List’s conversation rate fell from 1.1 percent in Sept. to 0.8 percent in Dec. Recently released Contract Killer 2 reported the highest DAU count, with 263,000 players opening the game on a daily basis.
Contract Killer 2 was also the most lucrative title for Glu, generating $2.7 million in non-GAAP revenue in Q4 for the company. In close second was Eternity Warrior 2, pulling in $2.5 million in the same quarter, up from $2 million it generated in Q3 2012.
For its first quarter in 2013, Glu estimated non-GAAP smartphone revenue between $16 million and $17 million, which is lower than Glu’s estimate for Q4 2012 of revenue between $17.5 million and $18.5 million. The company predicted between $84 million and $88 million for the 2013 fiscal year, up from its prediction of $73.6 million to $74.6 million it gave in the Q3 2012 earnings report. As of Dec. 31, 2012, Glu finished the year with 22.3 million of cash in its war chest.
The company’s stock price fell by nearly five percent after the release of its earnings report to $2.12 per share, with a market cap of $139.8 million. (more…)
Mobile game developer and publisher Glu Mobile announced today that it has cut 25 percent of its staff from the Kirkland, Wash. office and five percent from the San Francisco office as well as shut down its Sao Paulo office to concentrate resources in Glu Mobile’s six other offices.
Glu Mobile president of studios Matt Ricchetti will also be changing roles and heading up its Kirkland, Wash. office (Griptonite Games). Glu Mobile said in its Q3 2012 earnings call that it will be holding total R&D investment steady between 2012 and 2013, so it can rebalance its R&D function worldwide. The changes are said to increase the company’s monetization oversight.
This isn’t the first time Glu has restructured. Back in Aug. 2011, Glu Mobile let go several key executives including vice president of marketing Michael Breslin, chief creative office Giancarlo Mori and Sarah Thompson, who ran its partnership program.
Gears & Guts is a new iOS and Android game from Glu Mobile. Like most of Glu’s other titles, the game is a freemium affair that is free to download but features a robust monetization strategy based around in-app purchasing of virtual currency.
Gears & Guts casts players in the role of a driver in a zombie-infested city. By taking on a series of missions, players must attempt to clear the world of the walking dead while improving their survivability by upgrading their vehicle and strapping various items of death-dealing hardware to it.
The game’s main action takes place from a top-down perspective. Player are directed to their mission objective by a large on-screen arrow, and may move their car by using either touch or tilt controls. Both work reasonably well, though touch controls allow for more precision and seem to be the better option overall. Any weapons attached to the car automatically fire if a zombie enters their range of effect, leaving the player free to focus on the driving and avoiding of obstacles. Defeating zombies either by running them over or using weapons provides the player with experience points, and leveling up during a mission automatically refills the player’s health bar.
Players acquire soft currency to upgrade their vehicle and weapons through normal play but lose everything collected in a single mission if the car is damaged beyond repair. “Revive” tokens may be purchased using hard currency to prevent this from happening, and hard currency may be purchased in packages ranging from $1.99 to $99.99. Free hard currency is also available to players via a Tapjoy offer wall.
The upgrading of items makes use of a system somewhat reminiscent of the currently-popular “card battle” games on mobile. By completing missions (and via a daily bonus), players collect various cards, some of which are more rare than others. These may then be “fused” together in order to level them up and produce more effective items of death and destruction. The player’s car is then assigned an associated “power level” according to the items it has equipped, and this gives the player a rough idea of how ready they are for a specific challenge in the game. The game will warn the player if their power level is too low, but doesn’t stop them from attempting the mission if they believe themselves to be skilled enough to tackle it.
Gears & Guts is a solid game at its core, but not without its issues. For starters, the in-game store is a real mess more concerned with flashy, eyecatching glitz than any attempt to make it navigable or easy to find specific items. Secondly, the frame rate when in a mission chugs significantly even on the high-powered hardware of an iPhone 4S, and the visuals certainly aren’t impressive enough to be putting that much of a strain on the phone’s graphics processor. Finally, during play it becomes quite difficult to identify what items are zombies that can be crushed and what are obstacles that will cause damage to the player. This can leave the gameplay feeling a little cheap and unfair at times, though thankfully the game does not feature an energy system to throttle sessions, meaning a failed mission is more a mild inconvenience than something that will cost the player money or time.
Gears & Guts is a solid addition to Glu’s strong lineup of mobile games for both iOS and Android, but it would be good to see a little more care and attention given to the graphical performance and user experience aspects of the game. As it stands, a potentially “great” free-to-play game is simply “good.” There’s plenty of scope for expansion and improvement over time, though, so the future looks bright for this fun little game.
Gears & Guts’ iOS incarnation is currently ranked at No. 215 in Top Free iPad Apps, No. 192 in Top Free Games and No. 97 in Top Free iPad Games. It is also the No. 331 Top Grossing app, No. 240 in Top Grossing iPad Apps, No. 225 in Top Grossing Games and No. 148 in Top Grossing iPad Games. On Google Play, meanwhile, Google reports that the title has been downloaded between 100,000 and 500,000 times since its launch.
Lil’ Kingdom is a new game from Glu Mobile. The title is a Tiny Tower-inspired building game, and has been downloaded over 500,000 times from Google Play since its launch, showing up as the No. 32 top grossing Android title at the end of last week.
Note: This title was tested on a Motorola Xoom tablet running Android 3.2. No compatibility or performance issues were encountered.
After choosing a name for their castle and naming the resident princess, players are introduced to the game’s basic mechanics via a brief tutorial. Gameplay is almost identical to Nimblebit’s Tiny Tower, albeit digging down instead of building up. Players build increasingly-deep floors in their castle which may either be residential or commercial in nature. Residential floors allow players to provide housing for residents, who can then be used to staff the commercial floors and make money. Most tasks, be they building a new floor or restocking a commercial floor, take a particular period of real time to accomplish, though they may be “hurried” using hard currency — this may be purchased with real money or, like in Tiny Tower, earned gradually through normal play.
Sometimes, characters will knock on the player’s door and request to be ferried to a particular floor using the castle’s elevator system. Some of these characters have special abilities — dwarves, for example, have the ability to hurry production of a new floor without having to expend hard currency. At other times, the castle’s princess will request a specific product that is in stock on one of the commercial floors, and the player is then required to carry a character to the relevant floor before a timer expires. As the inverted tower expands, this time limit becomes tighter, so the player is able to upgrade the elevator’s speed using large quantities of hard currency.
The game also features a “collection” mechanic where players sometimes find special items after completing one of the princess’ requests. Completing collections unlocks the ability to build special floors which provide various bonuses to the player, allowing them to earn soft currency quicker.
Lil’ Kingdom does not feature social play, unlike Tiny Tower and other similar titles such as Zynga’s Dream Heights. Part of the attraction of Nimblebit’s original title in particular was competing against friends to see who could build the highest tower the quickest, and that incentive is not present in Lil’ Kingdom. Zynga’s Dream Heights built on this formula by allowing players to build connections to other players’ towers and trade with them, but that facility, too, is not present in Glu’s offering.
Lil’ Kingdom, in short, is simply a game to play for the sake of playing — there is no specific end goal and no means of competing against other players. This is not necessarily a bad thing — the Tiny Tower formula is proven to be popular and addictive for many players, and the game’s large number of downloads and strong showing in the Top Grossing charts for Android suggest that it is finding an audience. How long these players will continue playing (and paying) without social features and competitive play, however, remains to be seen.
Lil’ Kingdom is available to download now for Android devices via Google Play. It is also available as a Universal app for iOS devices via the App Store. On iOS, the title peaked at No. 8 in the Top Free iPad Games chart, and is currently placed at No.310 in Top Free iPad Games, No. 278 in Top Grossing Games and No. 208 in Top Grossing iPad Games.
It’s been a rough ride for Glu Mobile over the last few years. But it looks like the company revenues are just holding steady as smartphone revenues compensate for the declines in Glu’s old feature phone business. That suggests it may be able to cross over into profitability next year.
Glu’s smartphone revenues tripled year-over-year to $10.1 million, meaning the company now makes about two-thirds of its revenues from iOS and Android. A year ago, just one-fifth of Glu’s revenues came from smartphones, showing that the company is managing the transition to iOS and Android. Shares rallied on the news, climbing 6.1 percent in after-hours trading to $4.19.
Glu grew daily active users to 2.9 million from 2.1 million in the previous quarter, while monthly active users went from 22.1 million to 31.4 million. (Zynga, for comparison, said it had 13 million daily active users on mobile devices in December.) The number of in-app purchases rose to 1.52 million in the fourth quarter from 866,000 in the previous one. The average purchase size declined to $5.79 from $6.40 as Glu used discounts to boost overall volume.
Android revenue grew to $4.3 million in the fourth quarter, but its share of Glu’s total sales fell to 29 percent. That mirrors the trend we saw with Apple’s remarkable $46.3 billion quarter boosting the entire iOS ecosystem relative to Android.
That said, it looks like near-term growth is slowing and Glu is still at least a year away from being profitable. Glu grew smartphone revenues by just $400,000 over the previous quarter in what was supposed to be one of the most lucrative periods of the year for developers given the iPhone 4S launch and the holidays.
The market is just becoming more competitive as we’re now hearing that it’s now taking around 100,000 downloads to break into the top 25 free apps in the U.S. Previously, developers only needed to break the 100,000 mark if they wanted placement in the top 10. (Apple also warned developers not to game rankings this month.)
“The periods of time in which games retain their peak revenue is shortening,” noted chief executive Niccolo de Masi. The other key point to remember is that Glu’s growth in the first half of the year was also enhanced by offer wall revenues, a strategy which is no longer viable because Apple clamped down on these practices back in April.
Even as churn continues to push titles in and out of the top quickly, a few of Glu’s brands seem to have staying power. The action-adventure game Gun Bros has earned $7.9 million since its launch in 2010. In the fourth quarter, it earned $1.4 million, only slightly down from the $1.5 million it earned the previous quarter. Another stalwart, Contract Killer, brought in $1.9 million. Bug Village brought in $700,000 while Eternity Warriors earned $1 million.
Overall, Glu Mobile doesn’t expect to be profitable until after this year when it breaks even on an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the fourth quarter of this year. The company widened its annual loss to $21.2 million compared to $11.4 million the year before because it made a big bet through the acquisitions of Griptonite and Blammo Games in the middle of the year. The net loss for the fourth quarter was $10 million.
However, the picture could change as Blammo just published its first game Stardom and Glu expects that Griptonite will start producing titles by March. The Griptonite deal also brought $10 million in cash on the studio’s balance sheet to Glu. Glu will end the year with $32.2 million in cash on its balance sheet, up from $12.9 million the year before.
Glu says smartphones revenues (on non-generally accepted accounting principles or Non-GAAP) will come in at between $14 and 15 million this quarter. For the year, smartphone revenues should make up between 83 and 95 percent of the company’s total Non-GAAP revenues. Glu says it expects Non-GAAP smartphone revenues to come in between $71.0 million and $75.0 million for the full year.
Glu Mobile has had a major restructuring following the acquisition of two gaming studios, as the company continues to ramp up its smartphone gaming business.
Several key executives including vice president of marketing Michael Breslin were said to have been let go. Pocketgamer also says that chief creative officer Giancarlo Mori has left the company too. Sarah Thomson, who just joined the company last month to run its partnership program, gPartners, which sources deals with promising third-party game game development studios, was also let go. The full number of layoffs, which apparently happened yesterday and one day after the company’s earnings call, is unknown.
“We do not comment directly on personnel matters. Our focus is on the future of Social Mobile gaming and we are poised to continue delivering high-quality and innovative games,” Glu said in a statement. “This focus combined with recent acquisitions and strong development partnerships will drive continued growth.”
Glu, which is making a challenging transition to smartphone gaming from feature phone games, said this week that it acquired two gaming studios for stock and earnouts worth more than $50 million. One of those acquisitions, Griptonite Games, effectively doubles the company’s development capacity by adding 200 employees.
While Glu’s smartphone business has been picking up, rising to $9.4 million in the second quarter of this year, it hasn’t been fast enough to make up for the shrinking feature phone side of the business. The company still produced a net loss of $1.75 million in the second quarter and projects a net loss of between $7.4 and $8.2 million in the third quarter because of costs to cover the additional headcount from the two acquisitions.
The marketing environment has also become more challenging in recent months with the loss of incentivized installs on iOS, which had been Glu’s strongest user acquisition channel. The marketing side of the company was tasked with finding good alternatives, but finding replacements has been difficult.
On the revenue side, Glu said in its earnings call on Tuesday that other options for replacing offer wall revenue were only making up between 15 and 25 percent dollar for dollar. That’s down from what the company said in May, when it expected to replace 50 to 75 percent of offer wall revenue with incentivized video ads.
Glu Mobile, a publicly-traded mobile gaming company that specializes in freemium apps, unveiled a summer lineup of games today that looked familiar with an even split between hardcore shooters and casual resource management titles. But it also included one very novel concept, Tunity, a location-based social music app that might have some issues with gaining critical mass because of how unique it is.
The hardcore part of the lineup includes Eternity Warriors, a Medieval-themed melee combat game, space shooter Star Blitz and a multiplayer version of Glu’s big hit Gun Bros. That game boasted $2.3 million in revenue and an average of 215,000 active users per day in the first quarter.
The other half of the portfolio is made up of casual sim games. They include city-builder Space City, another game where players manage a circus called Circus City and Wildlife Safari, which is reminiscent of Pocket Gems’ Tap Zoo except with higher-quality 3D graphics.
“We believe in innovation by evolution,” said Giancarlo Mori, Glu’s chief creative officer. “We don’t want to walk away from what people have learned.” That said, he said sim games will get progressively more sophisticated as players get used to appointment-based mechanics.
Mori pointed out that each of Glu’s upcoming titles adds some new elements to the genre. Even though Eternity Warriors and Star Blitz may be built off the Gun Bros game engine, they add new features like melee-style or vehicular combat. Multiplayer Gun Bros obviously gives users the ability to play with friends in real-time.
In Wildlife Safari, players will have to also defend their animals from poaching in addition to well-known mechanics around earning income from different animal pens and buying decorations. In another forthcoming sim game Circus City, players acquire buildings and performers in the build-up to a circus performance.
Even if Glu reuses the same game engine for multiple titles, the company says that doesn’t necessarily cut down on development times or budgets for individual games. “Consumers are demanding the latest and greatest of the genre,” said chief executive Niccolo de Masi. “Because we’re not essentially doing what we were doing before, we don’t have development times compressed to a week or month.”
The last game Glu mentioned today is Tunity, which is a much more inherently social title than any of the games the company has released previously. It’s a location-based game where players can tag songs to places around them, and in turn share stories of meaningful moments and the music tied to them with friends.
It’s the one app in the portfolio that at its core is really innovative, but that may also be its Achilles heel. Even if the other games aren’t conceptually new, they are far more marketable to the company’s existing base of players. There are a few other social music apps out there like Schematic Labs’ Soundtracking. But location adds a whole other dimension of complexity to the problem of seeding the app with a meaningful number of friends for the app to be useful.
As for the future, Mori said he’s hoping other genres like sports will start to mature on mobile platforms. Racing is another possibility. In terms of tablets, Glu is still designing games that can basically work in the same way on both phones and larger devices. Mori said that perhaps with the next generation of tablets and as the iPad and Android devices gain a larger installed base, the company will start building games specifically with that format in mind.
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