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Friday, September 14, 2012

Glu Mobile bets on iPhone 5 gamers to score big


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Smartphone games maker Glu Mobile expects a big boost to its sales from the success of Apple Inc's iPhone 5, which analysts predict will sell 33 million units this quarter.

The maker of mobile games such as "Big Time Gangsta" expects about two-thirds of its revenue this year from Apple's iOS mobile platform, said Chief Executive Niccolo de Masi.

Glu, which competes with social games company Zynga Inc, forecast revenue of between $94.4 million and $96.4 million for 2012 last month.

The popularity of the company's games on the Apple platform fuelled rapid growth for Glu last year, bringing in nearly a third of its total revenue of $66.2 million.

"In the fourth quarter of 2011, we came in 10 to 15 percent ahead of guidance because of the iPhone 4S release," said Masi, who took the top job in Glu in 2010 and steered its focus from feature phones to smartphones that use Apple and Google Inc's platforms.

He expects the iPhone 5 to be have at least the same impact in the fourth quarter of this year and the first quarter of the next.

The new iPhone, launched on Wednesday, has a bigger screen and supports 4G wireless technology.
San Francisco-based Glu, whose games can also be played on tablets, plans to add 8 to 10 games in the rest of 2012 to the 12 it launched in the first half of the year. All of those are optimized for iPhone 5, Masi said.

"The main advantage Apple has right now is that they are doing great business in China," the CEO said.

China will overtake the United States as the world's biggest smartphone market this year, according to research firm IDC.

The company follows a "freemium" business model luring in customers with some free products and services and then trying to get them to pay and upgrade to premium versions.

The game maker's stock has risen 50 percent in the past 12 months. It closed at $4.79 on Nasdaq on Thursday.

In contrast, shares of rival Zynga, which is largely dependent on social networking giant Facebook Inc for revenue, have lost about 70 percent of their market value since it went public in December at $10 a share.

"We're a mobile-only company. We don't make games for Facebook. We only cater to Apple, Google, Amazon and Microsoft platforms, and sell through their stores," Masi said.

Glu expects revenue from Google's Android platform to match those from iOS as more handsets start operating on Android, Masi said.

The company, which also licenses games from video game publishers such as Activision Blizzard Inc, got about 11 percent of its 2011 revenue from Android users.

Copyright Thomson Reuters 2012

Source:- NDTV

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