UPDATED 07:46 EDT / AUGUST 03 2011

Freemium, In-App Purchases Bring Profit to Glu Mobile

Glu Mobile, publisher of 3D social mobile games for smartphone and tablet devices, held their Q2 2011 earnings call yesterday, with revenues on the rise.  Q2 marks a turning point for the mobile gaming platform, rising alongside growing trends across the industry.

Highlights of the earnings call:

Total installs of Glu Mobile games on smartphone devices grew by 31.7 million to reach over 101 million. Daily active users grew over 70% to average 1.6 million in the month of June.  Monthly active users expanded inline to average 16.5 million in June.

Total non-GAAP smartphone revenue of $9.7 million was up 43% quarter-over-quarter and 334% on a year-over-year basis. Total non-GAAP revenues were $17.9 million, which was both on a quarter-over-quarter and year-over-year basis. Original IP accounted for 49% of overall non-GAAP revenues, which resulted in improved gross margin of 83%.

As mobile and social gaming become areas of exploration for new monetization methods, tactics like in-app purchases prove fruitful for Glu Mobile.  The game publisher had 999,000 in-app purchase billable transactions, which was an increase of 755,000 in the first quarter of this year. The average revenue per in app purchase increase from $2.31 to $4.07 due mainly the higher price points for Glu’s virtual goods, a trend well noted in Appcelerator’s latest mobile developer report for major areas of interest.

Glu Mobile had 16.5 million monthly active users, up from 11.9 million monthly active users in March 2011. That includes 1,639,000 million daily active users for the month of June 2011 across Apple, Android and Facebook up from our March 2011 DAU of 953,000 which represents a 72% quarter-over-quarter increase.

Where does Glu go from here?

Glu Mobile is an influential publishing platform for the gaming industry, attracting developers for distribution and marketing.  The publisher’s expanding its acquisitions and partnerships as independent marketplaces and storefronts become more relevant in today’s mobile ecosystem.  Glu’s acquisition of Griptonite Games is a leading developer of high-quality titles for handheld platforms based in Kirkland, WA.

“We are excited to be joining the Glu family of studios, and look forward to being a major contributor to Glu’s social mobile gaming momentum” stated J.C. Connors, Griptonite Studio Head.

Blammo, the Toronto-based company run by Christopher Locke who is one of the creators as well as producer of several freemium top ten grossing iOS titles including Smurf’s Village and Zombie Café, ia also partnering with Glu.

Glu Mobile already has an extensive global reach, but maintaining its international appeal is a priority as the gaming publisher continues to expand in size and revenues.  A new partnership agreement with China’s largest mobile entertainment company TOM Group, will bring some of China’s leading smartphone games, storefronts and communities even closer to Glu’s user base.

“The collaboration marks a key milestone for TOM Group in unlocking the value of its cloud-based cross-device open platform. It also evidences the materialisation of our strategy to become a landing platform for our international partners to localise their technology and applications and tap into the Chinese market.”

“We are very pleased to have completed these acquisitions, as they represent an important step in scaling our business and executing our social mobile games strategy,” stated Niccolo de Masi, Chief Executive Officer of Glu. “The integration of these acquisitions will approximately double our studio capacity dedicated to freemium titles, as well as add proven casual, freemium DNA to our team. We look forward to the exciting contributions that the Griptonite and Blammo teams will collectively bring to our 2012 social mobile gaming pipeline.”

Glu is really gaining traction on mobile gaming as consumers are utilizing their freemium services, another important tactic that’s finding its niche in this industry.  This just proves that whatever device you may own, be it an iOS, Android or webOS-powered gadget, apps and games are the number one use of mobile devices these days.  We’ll only continue to see economic development around mobile gaming in particular, attracting marketing and virtual goods milestones as mobile networks expand and become more established.


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