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Glu Mobile

Glu Mobile - Overview

Glu Mobile is an American company specializing in the development and production of mobile games. Founded in San Francisco, California, in 2001 under the name Sorrent. Back in December 2004, Sorrent merged with Macrospace, and in 2005 the company formed a new corporate identity thus, Glu Mobile was born. During 2005, Greg Ballard replaced Sorrent founder Scott Orr as it’s acting CEO. Throughout 2006, Glu Mobile acquired iFone, and Chinese mobile game producer, Beijing Zhangzhong MIG Information Technology Co. Ltd. Additionally, the acquisition process continued over the years leading to the purchases of Superscape in 2008 as well as Griptonite Games in 2011, which effectively doubled the internal development capacity within Glu Mobile. Through their active efforts of competitor acquisition, Glu has been able to add value to its intellectual property portfolio and robust development team.

Another change in corporate structure took place in January 2010 when Niccolo de Masi joined the Glu Mobile team as its president and CEO. Previously, he was the CEO of Hands-On Mobile. Niccolo has changed the company trajectory towards a freemium business model that focuses on Glu’s original IP. During his time at Glu Mobile, Niccolo acquired PlayFirst on September 3, 2014, effectively adding more casual gaming content to its software library. Furthermore, China’s popular technology company, Tencent paid $126 million to buy a 15% stake in Glu Mobile, which has since been increased to a 20.8% stake as of 2017. However, Niccolo was replaced as president and CEO Nick Earl in November 2016. Currently, Nick is still the CEO and president of Glu Mobile.

One hit wonders? Or sustainable growth franchises?

In early 2013, Kim Kardashian: Hollywood was initiated to create a casual mobile game that could add value by adding popular celebrity appeal, The CEO at the time, Niccolo felt that Kardashian was the “best brand fit in the world”. After it’s 18-month development, Kim Kardashian: Hollywood was released in June 2014 and managed to rake in $1.6 million in revenue within five days of its release. At the end of the first quarter, it had a total of 22.8 million players and made $43.4 million. Over time, however, the popularity of the game waned causing the company to realize it needed to rely on fads to achieve sustainable long-term growth.

Glu has improved upon its past model by diversifying its gaming line-up across multiple genres, which range from sports, entertainment, and fashion to simulation, and casual. In addition, Glu has divided their titles into two categories including growth and evergreen. Furthermore, Glu defines growth games as key financial drivers, which are organized by bookings revenue projections – or the amount spent by users on in-game goods. Currently, there are three games among the growth titles: Tap Sports Baseball, Covet Fashion, and Design Home. Altogether, these three titles accounted for 76% of Glu’s bookings last quarter. By properly investing in these key growth drivers, they are able to build a stronger foundation of financial strength. For example, Tap Sports Baseball increased it’s bookings by 48% after it’s 2018 edition launched in March. This surge in bookings was largely in part due to the features within the game including player customization, console-quality graphics, and the ability to predict the results of real MLB games.

Glu Mobile - Market Overview

Projections for the mobile gaming industry project sales to reach upwards of $115 billion before the end of 2018. Currently, mobile gaming accounts for roughly half of all global gaming revenue. In 2017, mobile gaming generated more than 80% of all revenue for Apple iOS and Google Play Stores. The shift in gaming from homebound console games to mobile-centric games enabling on-the-go gaming convenience has given way to new and emerging classes of gamers, which in turn drives up time spent and play frequency metrics relative to previous demographics. Today, more women play mobile games than men. In addition, mobile games are increasingly popular among older demographics.

Glu Mobile - Board of directors

Niccolo de Masi
Previously, Niccolo served as President and CEO of Glu mobile when he joined in January 2010. Prior to that, he was CEO and President of Hands-On Mobile from 2008-2009. Between 2006 – 2007, Niccolo was CEO of Monstermob – a London-listed mobile entertainment company. Earlier on, he worked in a variety of roles throughout corporate finance, technology, media, and telecommunications. His career began at, JP Morgan working on both the TMT debt capital markets and mergers and acquisitions teams in London. Mr. de Masi holds an M.A degree in Physics and an MSci. degree in Electronic Engineering – both from Cambridge University.  

Nick Earl –
Currently, Nick serves as the President and CEO of Glu in addition to holding a seat on the company’s Board of Directors. Before working at Glu, Nick served as President of Worldwide Studios at Kabam and presided over title hits including Marvel: Contest of Champions. During his time at EA, Nick was the SVP of EA mobile, overseeing popular freemium titles such as The Simpsons: Tapped Out, The Sims FreePlay, and Real Racing 3. In addition, Earl led the companies transition from its prior premium model to its current freemium model. Before his time at EA mobile, he was senior vice president of EA Games and launched successful console and PC franchises such as Knockout Kings, James Bond, Tiger Woods PGA Tour, The Godfather, The Sims, The Simpsons, Lord of the Rings, and Dead Space. Nick holds a B.A degree in Economics from the University of California at Berkley.

Eric Ball –
After joining Glu’s board of directors in October 2013, Eric chose to serve as the Chairman of the Audit Committee in January 2014. Ball previously served as Senior Vice President and Treasurer for Oracle and brings to Glu strong public company experience in his management of worldwide treasury operations, and other financial market skills including capital markets activity, investment portfolio, foreign exchange, stock services, and risk management. Before working at Oracle, Ball spent his time at a variety of headquarters and operating finance roles at places such as Flextronics, Cisco Systems, Avery Dennison, and AT&T. Furthermore, he was named as one of the “Top 40 under 40” in Finance by Treasury and Risk Management magazine in November 2003.

Ann Mather –
Ann Mather became a part of Glu’s board of directors in September 2005. Currently, Ann also sits on the boards of directors of Alphabet Inc., Arista Networks, MGM Holdings Inc., Netflix, and Shutterfly. Also, she is one of the independent trustees of the Dodge & Cox Funds. Between May 2004 and 2005, Ann served as director of Shopping.com. From 1999 to 2004, she was the Executive Vice President and Chief Financial Officer for Pixar Animation Studios where she was responsible for administration, finance, investor relations, and human resources. In addition, Ann was Executive Vice President and Chief Financial Officer at Village Roadshow Pictures, and she held multiple executive roles at the Walt Disney Company between 1993 to 1999.

Conclusion

Glu Mobile has proven it has the ability to capitalize on popular celebrity trends and create long-lasting sustainable growth titles that can generate enduring revenue. In addition, Glu Mobile has an all-star Board of Directors with massive amounts of financial and corporate experience to help power the company through tough times and stay on top of innovations. As the mobile gaming sector expands over the next few years, Glu Mobile represents an opportunity to gain portfolio exposure into this lucrative market sector.

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